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HIGHLIGHTS OF ARTICLES FROM  JULY 2016 ISSUE OF NANDINI CHEMICAL JOURNAL

 

Highlights of Some of the Articles

GOVT. ’s  PROPOSAL TO REVIVE DEFUNCT  FERTILISER PLANTS - FACTORS  THAT  NEED TO BE LOOKED INTO

IS PRIME MINISTER’S CAMPAIGN FOR INDIA’S ADMISSION TO NUCLEAR SUPPLIER GROUP NECESSARY ?

HIGH PURITY ALUMINA – INVESTMENT OPPORTUNITY

MANITOL – INVESTMENT OPPORTUNITY

DIMETHYLAMINOPROPYLAMINE (DMAPA) – PRODUCT PROFILE

FEATURES OF SOREK DESALINATION PLANT IN ISRAEL

WHITHER START UP INDIA ENTERPRISES ?

ARE PRIVATE EQUITY FUND HOLDERS IRKSOME PARTNERS IN INDUSTRIAL ENTERPRISES ?

REACH – UPDATE OF ACTIVITIES

PLANT CLOSURES

ANTI DUMPING PAGE

NEWS ROUND UP - INTERNATIONAL

CHINA NEWS

TECHNOLOGY DEVELOPMENTS

NEWS ROUND UP – INDIA

AGRO CHEMICAL PAGE

ENERGY PAGE

ENVIRONMENTAL PAGE

 

TALK OF THE MONTH

  

GOVT. ’s  PROPOSAL TO REVIVE DEFUNCT  FERTILISER PLANTS

FACTORS  THAT  NEED TO BE LOOKED INTO

 

Government  of India appears to have decided to push through the revival of the defunct fertiliser plants at Gorakhpur, Sindri, Barauni, Ramagundam and Talchar, which stopped operating more than a decade back.

The Prime Minister’s Office is reported to have put in place an action plan to invest several thousand crores of  rupees to revive the three defunct fertiliser units  located  at Gorakhpur, Sindri and Barauni, with public sector funding, by early 2020.

Considering the need for promoting  large scale investment in the country to  spur growth and the reluctance of private sector, the proposal should be viewed positively.

Government’s proposed action plans

Indian Oil Corporation will join Coal India and NTPC Ltd to form a joint venture called Hindustan Urvarak and Rasayan Ltd. The new entity will revive three sick fertiliser plants at Sindri (Jharkhand), Gorakhpur (Uttar Pradesh) and Barauni (Bihar), at a total investment of around Rs.20,000 crore.

Fertiliser Corporation of India Ltd will also have a small share in the venture.

Government of India has decided that since Coal India, NTPC and Indian Oil Corporation are cash rich public sector enterprises, they will contribute equity to revive the three fertiliser plants.

The fertiliser plants will be the anchor customers for the Phulpur-Dhamra-Haldia pipeline being built at  cost of over Rs.12,000 crore.The pipeline is being built in three phases, slated for completion by December 2019.

Earlier, public sector undertakings namely NTPC and Coal India Ltd (CIL) signed a joint venture agreement for reviving the closed  naphtha based Gorakhpur and Sindhri urea fertiliser units of the near defunct Fertiliser Corporation of India (FCI) with the investment of around Rs.18,000 crore, with  debt: equity ratio of 2:1, with public sector firms (NTPC, CIL and IOC) bringing in around Rs.2,000 crore of equity each.

RCF,GAIL and Coal India Ltd were asked to take the responsibility of reviving Talchar unit using coal as  feedstock.

Urea plant at Ramagundam has been proposed to  be established by the Ramagundam Fertilisers & Chemicals, a joint venture between NFL, EIL and FCIL, with an estimated investment of   around Rs. 5,254 crore.

Ground reports suggest that  little progress  has been made so far in reviving Talchar  and Ramagundam units.

Poor response from private sector

Earlier, Government of India attempted to prompt private sector to revive the above sick fertiliser units and the efforts of the government were unsuccessful .

In March 2016, Minister of State for Chemicals & Fertilizers told Parliament that the Gorakhpur unit attracted only one bidder who turned out to be ineligible.

The unwillingness or inability of the private sector to invest in projects to revive the defunct fertiliser units are evident. Obviously, Government of India has no alternative other than taking steps to revive the units by investing on its own.

Feedstock for urea projects

The urea projects  proposed to be revived have to be necessarily based on natural gas, so that  they would be economically viable and would also meet environmental stipulations.

Government of India has taken a decision that naphtha based urea projects will not be approved in future.

Coal based  urea projects may prove to be controversial in view of the environmental issues involved, particularly in the context of the Government of India’s commitment to  Paris Climate Conference. It is extremly doubtful as to whether  the coal based urea projects will take off

The revived units in Sindri, Gorakhpur have to  use natural gas as raw material. One of the biggest problems facing these fertiliser units’ revival is feedstock (natural gas) availability.

The proposed pipeline to ferry the gas from Jagdishpur to Haldia could not take off so far, as there were no confirmed takers for the gas. Proposed sometime in 2005, the pipeline is still on the drawing board stage.GAIL has been asked to complete this long delayed Rs.12,000 crore gas pipeline project by the time the gas based fertiliser units would be ready to commence production.

Why not term them as new projects ?

While the feedstock for the projects have to be  natural gas, the feedstock used in the earlier operation of the plants was different.

The defunct fertiliser units have been remaining closed  for many years now and obviously, the machineries are outdated and must be in bad condition.

The engineering and technology practices have undergone much change for better in recent years.

Therefore, revival of the  defunct fertiliser units  will not be possible with old technology, plant and machineries and plant layouts. Almost the entire facilities have to be changed.

Therefore, it would be appropriate to scrap the  old plant  and machineries entirely and sell them off for scrap value. Even the building must be in bad condition and may defy the present safety regulations. Modifying the old  and outdated plant and machineries and layout of the building to suit the new technology would prove to be a counter productive exercise from the view point of feasibility and cost factors.

Under the circumstances, it would be appropriate to declare that new urea projects would be set up in the same land terming them as new and greenfield projects, instead of  calling them as revival projects.Such announcement would provide greater clarity and confidence to the investors and technical collaborators.

Put the land to optimism use

The defunct units have large area of land available. So much area of land will not be required for the modern urea projects with optimised design.

Therefore, the surplus area of land can be offered to private sector. which can use the surplus land for setting up ancillary projects that would serve the needs of urea fertiliser units.

Need to assess long term feedstock (natural gas) demand supply scenario

There is no likelihood of substantially increasing the production of natural gas in India in the near future. On the other hand, Indian production of natural gas  has shown declining trend  in recent years.

Natural gas production

Year

(April to March)

Natural gas production (BCM)

% Growth in natural gas production

2009-10

47.496

44.61

2010-11

52.219

9.94

2011-12

47.559

-8.92

2012-13

40.679

-14.47

2013-14

35.407

-12.96

2014-15

33.656

-4.94

 

Import  of LNG

Period

(April to March)

Import

 

Quantity in BCM

2008-09

10.9616

2009-10

12.441

2010-11

13.506

2011-12

17.971

2012-13

17.865

2013-14

17.724

2014-15

21.039

 

India’s import dependence of natural gas has been increasing at annual average growth  (AAGR) of 11.48%  in the past few years.

The requirement of natural gas for operations of the three fertiliser plants at Gorakhpur, Sindri and Barauni  for producing total of around 4 million metric tonne per annum of urea would be around 2.8 billion cubic metre .

It is not  clear whether the Government of India has made a comprehensive action plan with reference to  domestic demand, domestic  supply  and import scenario for natural gas in the forthcoming years. Several adhoc and hasty announcements have been made in the past, which have provided more confusion than clarity and confidence. Quite a few LNG terminal projects are  under construction and more are being planned, even while a few LNG terminals are operating at below capacity due to lack of connectivity. 

The country is committing itself to huge consumption of natural gas for use as feedstock and fuel  in future with indigenous production not increasing. This may prove to be a calculated risk, particularly since the global price of natural gas is bound to go up in future.

What demand for urea ?

Production and import of urea are as follows

Period

(April to March)

Production

Import

 

In 000 tonne

2011-2012

21,992.3

7,834

2012-2013

22,586.6

8,044

2013-2014

22,718.7

7,088

2014-2015

22,592.9

8,749

2015-2016

24.5

8.3

 

According to Chemical and Fertiliser Minister, Government of India “At present, all 30  urea plants  public and private sector, are operating at 120% capacity.Therefore, urea production is likely to increase by 1 million metric tonne to 25.5 million metric tonne in the year April 2016 to March 2017.”.

Source: Financial Express dated 16.6.2016

 

Recently, Government of India has taken measures to optimise the use of urea in the country by insisting on the production and use of neem coated urea. While it is claimed that consumption of urea have come down in the country due to the neem coated urea policy, it is necessary to assess the impact of this policy  in precise terms, so that the country would know as to what would be the precise requirement of urea in the coming years.

As the area of agricultural land is unlikely to increase, the growth of urea consumption  may even slow down.

Urea projects in pipelines

Matix Fertilisers and Chemicals Ltd., near Panagarh in West Bengal has been idling after investing around Rs.5000 crore in urea project due to non availability of coal bed methane (CBM). Non availability of CBM has forced the company to re schedule the commissioning date for the plant several times since 2013.

In the wake of the new investment policy, the Fertiliser Ministry is reported to have received 11 proposals for urea projects, out of which a few proposals are for setting up new units and the rest for capacity expansion of existing plants.

Private companies including Zuari Agro Chemicals, Indo Gulf Fertilisers, Chambal Fertilisers, Bharat Coal Chemicals and Nagarjuna Fertilisers and Chemicals Ltd have submitted proposals. Also, four PSUs – Rashtriya Chemicals and Fertilisers (RCF), GNFC, GSFC and FACT have proposed to set up urea projects under the policy.

Chambal Fertilisers and Chemicals Ltd is setting up 1.34 million metric tonne urea plant at Kota in Rajasthan with an estimated investment of Rs 5,940 crore.

The state run Rashtriya Chemicals and Fertilizers (RCF)  proposes to go to the public investment board for setting up its third plant in Thal, Maharashtra.

Plans are afoot by IFFCO to set up grassroots nitrogenous fertilisers project in the Nellore district of Andhra Pradesh.The project is estimated to cost Rs.1,560 crore and  will have an annual capacity of producing 7.26 lakh metric tonne of urea.

In addition to the above project proposals, the proposal for the revived urea project at Sindri, Gorakhpur,Barauni, Talchar and Ramagundam may  have urea capacity of 1.3 million metric tonne per annum each .

An integrated long term urea project plan is now vitally  necessary, so that there would be no wastage of resources in building capacity for urea beyond what the country need in future. The country should be clearly told about such policy approach.

Make  or buy  decision for urea

There is a view that Indian dependence on import of urea to the extent of more than 8 million metric tonne per annum  is not appropriate and  India has to take necessary steps to build indigenous capacity for urea to reduce  it’s import of urea. At the same time , lack of availability of natural gas in India and the need to import natural gas and possible international price fluctuation of natural gas may make economy of future  urea projects in India to be a matter of concern.

Given such circumstance, the question remains whether it would be appropriate for India to make urea or import urea. This question is not adequately clarified by the government’s  policy announcements so far.

Why not set up a few urea projects abroad ?

China is a large producer of urea in the world and will continue to dominate global market due to surplus  production.

The low cost of energy in some regions such as US,Russia, Middle East and Iran will provide definite advantage  for these countries in producing urea at low cost.

With India having no particular feedstock advantage, question arises as to whether India would be justified in building large urea capacities, since the new and revival projects have to be competitive with urea produced in other parts of the world.

While it is important that India becomes self sufficient in the production of urea to the extent possible, it may be appropriate for India to consider setting up urea projects in other regions in the world, where feedstock would be readily available and energy costs would be low.

Oman India Fertiliser Co is a joint venture with Oman Oil Company (50%) IFFCO (25%) and KRIBHCO (25%) which is operating with  urea capacity of 1.653 million metric tonne per annum at  Oman.

IFFCO plans to build a $1.2 billion urea production plant in Canada in partnership with Canadian company La Coop federee.IFFCO and la Coop federee plan to begin construction in Quebec in two years. The plant would produce up to 1.2 million metric tonne urea annually, which will be split evenly between IFFCO and La Coop.

More of such projects can be set up as joint ventures  abroad,where there would be ready availability of natural gas at low price,  with firm commitment to supply the urea product to Indian market.

One is not sure as to whether the government has considered these  options, while chalking  out plans for setting up new urea projects in India and revival of the closed ones.

Unrelated diversification

In its anxiety to boost the investment climate and revive the defunct fertiliser projects, Government of India is asking the public sector organisations such as Engineers India Ltd, Coal India Ltd, NTPC to invest in the fertiliser projects, which means that they also will have to participate in the management of these units to some extent.

Organisations like NTPC, Engineers India Ltd have not been  involved  in manufacturing fertilisers or management of fertiliser projects so far. Coal India also does not have such experience.

Such unrelated diversification activities of these public sector organisations will do good neither to them nor to the proposed urea projects.

On the other hand, organisations like NTPC, Engineers India Ltd, Coal India Ltd have lot of unfinished agenda on hand and they need resources and management time to fulfil their targets and meet the expectations. Under the circumstances, the Government of India should re examine whether it would be appropriate to involve such public sector organisations in the revival of the defunct fertiliser units.

 

IS PRIME MINISTER’S CAMPAIGN FOR INDIA’S ADMISSION TO NUCLEAR SUPPLIER GROUP NECESSARY ?

 

In recent months ,Prime Minister Narendra Modi has been paying great attention to achieve his chosen goal of making India a member of Nuclear Supplier Group (NSG). Mr. Modi’s recent visit to Switzerland, Mexico and USA appear to have been largely focused on enlisting the support of these countries for India’s entry into NSG.

In the process of Mr .Modi’s vigorous campaign, India has been subjected to criticism from some quarters about the nuclear tests that were carried out by India two times in the past, which were very critically and adversely viewed by many countries. To counter such criticism , Mr.Modi has to walk extra mile and tell NSG members that India would not repeat “such mistake” in future.

It is surprising that Mr. Modi has persisted with what appears to be his obsession to get into the NSG , even when the rule clearly says that all 48 members must endorse entry of a new member and China has vehemently opposed India’s entry . To complicate the matter further for India, countries like Pakistan has also sought entry into NSG.

Following details are discussed in this article

  • No significant benefits
  • Availability of uranium for India
  • Other viable options
  • Not a matter of prestige

 

 

HIGH PURITY ALUMINA – INVESTMENT OPPORTUNITY

 

High purity alumina (HPA), which is the high end form of aluminium oxide, has a wide range of industrial and high tech specialty end uses.

Characterised by  minimum purity of 99.99% (4N) Al2O3, HPA is the high end, high value product of the non metallurgical alumina market.

Due to its superior characteristics such as purity, extreme hardness and corrosion resistance, HPA is the essential base material for artificial sapphire substrates found in LEDs, also semiconductors and growing range of high performance applications.

CAS Number 1344-28-1
Molecular formula Al2O3
Appearance White powder
Solubility Insoluble
Melting Point Range >2000 deg. C

On the basis of purity, the global  high purity alumina (HPA) market can be divided into the following products

*          4N category - 99.99% Al2O3, with an impurity level of only 0.01 percent (100ppm)

*          5N category - 99.999% Al2O3, with an impurity level of only 0.001 percent (10ppm)

*          6N category - 99.9999% Al2O3, with an impurity level of only 0.0001 percent (1ppm)

 

Majority of global HPA sales and demand is for the 4N category.

Specification of 4N High Purity Alumina (HPA)

Description

Units

Specification

Al2O3

%

99.99

Si

ppm

11.1

Na

ppm

<0.100

Fe

ppm

<0.100

Crystal Type

 

α (alpha)

Particle size distribution <140µm

 

>=77

Particle size distribution <80µm

%

>=55

Particle size distribution <45µm

 

>=31

Particle size distribution <20µm

 

>=10

Surface area (BET)

m2/g

70.69

Colour

 

White

Following details are discussed in this article

  • Thrust area for demand
  • Use of high purity alumina in lithium ion batteries
  • Growth of lithium ion battery sector
  • Global demand
  • Global pattern of demand
  • Producers
  • HPA Processing Technology

 

MANITOL – INVESTMENT OPPORTUNITY

 

CAS No     69-65-8
Appearance

White, odourless, crystalline powder

Molecular formula   C6H14O6

 

Product specification