GAIL (India) Limited today signed Term Sheets for supply of natural gas to Barauni plant of Urvarak Videsh Limited and Bhatinda, Panipat and Nangal plants of National Fertilizers Limited . The Terms Sheets were signed by Shri B C Tripathi, Director (Marketing), GAIL, Shri V K Sharma, acting CMD and Director (Technical), NFL, Ms Neeru Abrol, Chairperson, Urvarak Videsh Limited and Director (Finance), NFL in presence of Shri Ram Vilas Paswan, Hon’ble Union Minister of Chemicals & Fertilizers and Steel.
Shri Atul Chaturvedi, Secretary, Department of Fertilizers, Shri R S Pandey, Secretary, Ministry of Petroleum and Natural Gas, Dr. U D Choubey, Chairman and Managing Director, GAIL, Shri S. Sundareshan, Additional Secretary, MoP&NG, Shri Deepak Singhal, Joint Secretary, Department of Fertilizers, Shri U. S. Jha, Chairman and Managing Director, RCF, Shri B D Sinha, Managing Director, Kribhco, Shri R K Goel, Director (Finance), GAIL, Shri Santosh Kumar, Director (Projects), GAIL, Shri A K Purwaha, Director (BD), GAIL, Shri Arun Singhal, CVO, GAIL and senior officials of the companies were present on the occasion.
It may be recalled that EGOM decision states that the demand emanating beyond 2008-09 from de-bottlenecking of and expansion of fertilizer plants, conversion of naphtha based and fuel oil-based fertilizer plants and revival of closed fertilizer units would be given the highest priority at that stage and will be met from production in subsequent years. Subsequently, EGOM had directed GAIL to sign Term Sheets with the future units namely closed fertilizer unit at Barauni and FO conversion units namely NFL Bhatinda, Panipat and Nangal.
NFL is operating its three fertilizer plants at Panipat, Bathinda and Nangal Plants with fuel oil as feedstock. The changeover of feedstock from fuel-oil to natural gas is estimated at a cost of Rs.1150.75 crore for each plant. The changeover of feedstock will reduce the energy consumption in these Plants, which in turn will, reduce the fertilizer subsidy outgo of Government of India to the tune of Rs. 662 crore per annum during initial five years. This saving is expected to go up to Rs. 741 crore per annum from 6th year onwards after completion of these projects.
According to the Term Sheets, GAIL will supply 2.11 MMSCMD gas to Barauni plant, 0.88 MMSCMD, 0.87 MMSCMD and 1.03 MMSCMD for NFL Panipat, Bhatinda and Nangal plants respectively. The initial supply date in case of Barauni is Oct 2012-June 2013 and June 2012 - December 2012 in case of NFL Fuel Oil conversion plants. The contract period is 15 years from the date of commencement of supplies. Gas for the supply will be sourced from sources like KG Basin block / other NELP blocks / RLNG etc.
The Barauni plant will be supplied gas through GAIL’s 1400 km (including spurlines) Jagdishpur-Haldia pipeline (JHPL) to be laid at an investment of approx. Rs. 7000 crore, whereas NFL plants at Bhatinda, Panipat and Nangal will be supplied gas through GAIL’s 610 km Dadri-Bawana-Nangal pipeline to be laid at an investment of Rs. 2500 crore. The 32 MMSCMD Jagdishpur – Haldia pipeline will open up energy corridor for major industrial use by other fertilizer plants and steel plants along the pipeline route.
The revival of Barauni unit by Urvarak Videsh Limited co-promoted by RCF, Kribhco and NFL is scheduled to be complete by 2012-13. The conversion of NFL plants is scheduled to be complete by 2011.
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The Government of India had accorded approval for revival of Barauni Unit of Hindustan Fertilizer Corporation Limited on 30th October, 2008 through Special Purpose Vehicle promoted by NFL, RCF and KRIBHCO as Joint Venture Company under the name Urvarak Videsh Limited. To make this brownfield gas based urea plant at Barauni viable, the Government has accorded in-principle approval to consider waiver of Government of India’s outstanding loans and interest. The plant shall have an annual installed capacity of 11.55 lakh MT urea and Natural Gas is a key input for its setting up.
The revival of Barauni Unit shall improve Fertilizer availability in the vicinity and bridge demand – supply gap of urea in the Bihar and boost up agricultural and economic development in the region while reducing import of urea and increase self-reliance in the urea sector.