FACT likely to import ammonia from Gulf countries

Faced with high cost of Liquified Natural Gas (LNG) to operate its ammonia plant, public sector Fertilisers and Chemicals Travancore (FACT) is likely to import ammonia from Gulf countries for production of fertilisers from early next month.
Import procedures were in the final stages, FACT sources said.
Most of the ammonia sources were in the gulf countries and around 10,000 tonnes would be sufficient for two weeks, the source said.
Cost-wise also it would be much cheaper to import ammonia than producing it here using LNG.
The ammonia plant of Fact, with a production capacity of 900 tonnes per day, was shut three days ago due to some technical snag in the boiler section, the source said.

The unusually high cost of LNG and the Petronet's demand to use the full consignment had forced the fertiliser giant to stop purchasing LNG from the Petronet terminal at nearby Puthu Vype.

The current rate of LNG is USD 21.5 per million British thermal unit (mmBtu), which is likely to be raised to USD 24.35 mmBtu. The Petronet is also insisting that FACT should take one full shipment of 80 million square meter gas.
"We require only half of the quantity to run the ammonia plant for two months," the source said. The plant will be closed down after two months for annual maintenance.

Fact's decision to stop purchasing natural gas from Petronet is a big blow to the terminal which is functioning with an under utilised capacity of eight per cent.
Prime Minister Manmohan Singh had recently commissioned formally the Rs 4,500 crore plant.
Meanwhile, the Kerala Chamber of Commerce and Industry (KCCI) will be organising a workshop on Jan 18 to discuss the various issues related to under-utilisation of the installed capacity of the Cochin Petronet LNG Terminal.
The meeting will be attended by representatives from the Gas Authority of India Ltd (GAIL), the Petronet LNG Ltd, the FACT, the TCC, the BSES, KSRTC, KSEB, the NTPC, CII, various Trade Unions and the Resident's Association Apex Council.

The workshop is expected to come out with an action Plan to fulfil the dream of a cost-effective green fuel for the industries and the households in Kerala.
The issues which would be discussed are government policies with regard to LNG pricing and allocation and distribution of domestically produced gas among the States need to be revised, KCCI sources said.