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GOVT.’S REVIVAL PROPOSAL
FOR CLOSED FERTILISER UNITS
REVIVE THEM BASED ON COAL
FEED STOCK
India is the world's biggest importer of urea and
di-ammonium phosphate (DAP) and the second biggest
importer of muriate of potash (MoP).
India annually imports close to 6 million metric
tonnes of urea, 8 million metric tonnes of DAP and 6
million metric tonnes of MoP .
The following figures indicate the increasing import
trend
Urea production vs.import
(Lakh metric tonnes)
| Year |
Production |
Import |
| 2000-01 |
196.24 |
0.00 |
| 2001-02 |
190.03 |
2.20 |
| 2002-03 |
186.21 |
1.19 |
| 2003-04 |
190.38 |
1.43 |
| 2004-05 |
202.39 |
6.41 |
| 2005-06 |
200.85 |
20.57 |
| 2006-07 |
202.71 |
47.19 |
| 2007-08 |
198.39 |
69.28 |
| 2008-09 |
199.23 |
56.67 |
| 2009-10* |
211.17 |
52.09 |
The Department of Fertiliser of Govt. of India in
the past few years, has been pursuing a case-by-case
approach towards revival of the closed units of
Hindustan Fertiliser and National Fertiliser –
particularly the closed facilities at Barauni, Sindhri,
Ramagundam, Talcher, Gorakhpur and Durgapur.
Even as Government of India is now taking steps to
revive the closed units, it is seen that even some of
the presently operating naphtha based fertilizer units
such as SPIC Ltd., and Madras Fertilisers are becoming
sick. These units also have to be revived.
The Government of India has now accorded an in
principle go ahead to revive three of the eight closed
plants. These three units are located at Sindhri in
Jharkhand, Talchar in Orissa and Ramagundum in Andhra
Pradesh. The remaining five units will be revived by
private participation, through a process of bidding.
However, Government of India still seems to lack
clarity about the feedstock issues for the fertilizer
industry. With no likelihood of natural gas supply
scenario significantly improving in the immediate
future and the present supply scenario of natural gas
already being very tight, what is the point in making
revival plans for the fertilizer units based on natural
gas as the feedstock?
Ideally, all the closed and sick fertilizer units
should be revived only based on coal feedstock.
With recent development in coal gasification
technologies, the competitiveness of the coal based
fertilizer projects have improved substantially.
Talchar plant revival
Coal India Ltd (CIL), Rashtriya Chemicals and
Fertilisers (RCF) and GAIL India plan to jointly set up
a coal gasification unit at Talcher, Orissa, to produce
urea and ammonium nitrate. The proposed project is to
be located at the closed facility of Fertiliser
Corporation of India (FCI).
The urea plant will adopt coal based gasification
technology. Coal India Ltd has committed supply of 3.7
million metric tonnes per annum of washed coal of 30
per cent ash content for the project.
The Talchar plant will be set up on Build Own and
Operate (BOO) basis for which global tenders will be
issued. It would also include a 850 tpd (metric tonnes
per day) nitric acid plant and 1000 metric tonnes per
day ammonium nitrate plant. The estimated cost of
setting up the plants (ammonia urea complex, nitric
acid and ammonium nitrate plants), will be around
Rs.6000 crore, taking the total investment to
approximately Rs.8,500 crore.
Sindhri plant revival
For the Sindhri unit, the Department of Fertilisers
has reached an in principle agreement with Steel
Authority of India Ltd., (SAIL) to set up an integrated
steel and power plant along with urea manufacturing
facility. This will have production capacity of 1.1
million metric tonnes per annum (mtpa) of urea. The
unit will be set up by a joint venture with National
Fertilisers Ltd.
SAIL proposes to set up of a 5.6-mtpa greenfield
steel making plant and a 1.1 mtpa fertilizer plant with
investment of around Rs.26,000 crore and Rs.4,450 crore
respectively. It also envisages establishment of a
power plant with an outlay of around Rs.4000 crore.
The proposed gas based urea plant would be set up
after dismantling and disposing the existing urea plant
at the site.
The government of India has already given its in
principle consent to allocate natural gas for the
project.
The total land available with Fertliser Company of
India at Sindhri is 6652.6 acres, out of which about
5481.6 acres of land would be available for the
proposed project.
Ramagundum unit revival
The Ramagundum unit will be revived jointly by NFL
and Engineers India Ltd.
Natural gas needs of fertiliser
companies
Two thirds of the India's urea capacity presently
use natural gas as feedstock, while the rest are run on
naphtha or fuel oil as feedstock.The Government of
India has directed fertiliser companies to convert fuel
oil- and LSHS (low sulphur heavy stock)-based ammonia
plants to natural gas-based ones.
While moving to gas-based units will result in a
saving of about Rs 2,000 for every metric tonne of urea
produced compared to naphtha based urea project, the
non availability of natural gas to the required level
is a grim issue that has to be faced.
Six fertiliser companies IFFCO, KRIBHCO, Rastriya
Chemicals and Fertilizers, Indo Gulf Fertilizers Ltd,
Chambal fertilisers and Chemicals Ltd and Tata
Chemicals Ltd have told the government of India that
they would expand their units by setting up 1.15 mtpa
urea plants at existing units with an investment of Rs
240,000 million. These fertiliser companies are seeking
an additional 25 million metric standard cubic metres
per day (mmscmd) of natural gas supply from Reliance
Industries Ltd's (RIL) Krishna-Godavari fields to cater
to the feedstock needs of their existing as well as
proposed new urea capacities.
But, the forecast of gas supply from KG Basin seem
to be not realistic and are exaggerated. As a result,
it is not clear from where the gas supply would be made
for the above expansion plans of fertilizer
companies.
Coal feedstock is the only
option
China, which has one of the largest reserves of coal
in the world, continues to establish many coal based
fertilizer projects that have proven to be economically
and technologically viable. India has to learn right
lessons from China and build its fertilizer projects
based on coal feedstock.
Coal gasification technology (Integrated
Gasification Combined Cycle- IGCC) are now well
established and are widely adopted with excellent
results.
In this context, it has to be noted that during
1950’s, the fertilizer plant at Sindhri was coal
based and was operating reasonably well. Lignite based
plants for ammonia/urea plant were also in operation in
India. Unfortunately, all these coal based fertilizer
projects were closed down due to the “craze” for
natural gas / naphtha based fertilizer units and
counter productive campaign by the environmentalists
against the coal based chemical projects.Those coal
based fertilizer units should have been sustained.
While the natural gas supply scenario is likely to
remain tight and naphtha based project is uneconomical,
. Government of India has to take firm decision to
revive the existing closed and sick units by using coal
as feed stock.
While India’s import of coal is steadily
increasing due to surging demand for coal in India, it
is certainly easier and less expensive to import coal
compared to natural gas, if found necessary for the
coal based fertilizer project.
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