New Delhi: With Prime Minister Narendra Modi reviving a Rs 10,000 crore gas pipeline to take gas to the east, Fertiliser Ministry is planning to set up two urea plants along the pipeline route.
The 2,050-km pipeline from Jagdishpur in Uttar Pradesh to Haldia in West Bengal will pass through Varanasi, Modi's constituency, and 16 other eastern cities. The pipeline will provide CNG and PNG services in these cities and provide feedstock gas to fertilizer plants in the region.
"We are exploring the possibility of setting up two fertiliser plants along the Jagdispur-Haldia gas pipeline, with investment of around Rs 10,000 crore," Fertilizer Secretary JK Mohapatra said.
The plants will need 4-5 million standard cubic meters per day of gas and will become anchor customers of the gas flowing to the east, he said. Fertilizer Minister Ananth Kumar has held two rounds of meetings with Oil Minister Dharmendra Pradhan and PSUs in both petroleum and fertiliser sector over the issue.
The blueprint of Jagdishpur-Haldia pipeline was drawn in 2004-05 but state gas utility GAIL India was reluctant to start work as it did not find the project economically feasible in the absence of a source of gas and consumers.
However, after Modi's push, GAIL has announced plans to restart work on the line though it has not indicated timelines for completion of the project. Refusing to identify the location of the urea plants, Mohapatra said a cooperative has envisaged interest in setting up a unit and the other plant could even be bid out.
According to sources, plants are expected to come up at the Fertilizer Corporation of India Ltd (FCIL) closed urea plants in Gorakhpur and Barauni. Natural gas accounts for as much as 65-70 per cent of urea production costs in India, and it is cost effective compared with other feedstock.
The country's urea production has remained stagnant at 22 million tonnes (MT), while current demand is about 30 MT, forcing the country to meet the shortfall of 8 MT through imports.
No urea capacity has been added in India in almost 13 years. The Fertilizer Minister hopes to boost the production of domestic urea by reviving the eight sick units, including five units of Fertilizer Corporation of India Ltd (FCIL) and three units of Hindustan Fertilizer Corporation Ltd (HFCL).
Earlier, the Fertilizer Minister had said that Talcher and Ramagundam projects would come on stream, but noted that they would need at least 36-48 months to become operational and require a combined investment of Rs 9,000-9,500 crore.
Meanwhile, the Fertilizer Ministry is also working on setting up a joint venture in the countries where gas prices are low.
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