Business Standard

RCF may partner GAIL for plant in Talchar

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P B Jayakumar Mumbai
The public sector Rashtriya Chemicals & Fertilisers (RCF) is likely to offer 50 per cent stake to GAIL (India) for the proposed Rs 2,400 crore venture to set up a coal-gas-fuelled urea-ammonium fertiliser plant at Talchar in Orissa.
 
"According to the in-principle agreement, it could be a joint venture project with 50:50 per cent stake. We need to work out the details," said a top level official with RCF, adding that the project needs to get clearance from the Planning Commission, cabinet and other regulatory agencies.
 
Sources said RCF had conducted techno-economic feasibility studies through two to three expert agencies about two years ago for setting up a chemical complex based on production of gas from coal. The company was then facing inadequate natural gas supplies to run its fertiliser plants.
 
RCF's urea plant in Trombay is defunct since the last five years due to insufficient availability of gas. Adding to its cup of woes is the government's policy, which mandated that all chemical and fertiliser companies have to switch over from naphtha to cheaper fuels in the future.
 
Though RCF had entered into fuel supply agreements with Reliance Industries and ONGC for gas supply from the Krishna Godawari basin, the prevailing uncertainty in the availability of gas was the prime reason for turning to the coal gassification project, sources said.
 
The company plans to use the latest coal gassification technology at the Talchar project which would use coal with high ash content up to 30-35 per cent.
 
RCF is already in the process of reviving its fertiliser plant at Talchar, along with the Durgapur plant, at an estimated investment of about Rs 6,000 crore.
 
The feasibility studies had revealed Talchar to be the most suitable site for the coal-based project, in view of infrastructure, facilities available and proximity to coal mines.
 
International scenario
RCF could not progress much on its plans to set up fertiliser projects in West Asia with a buy-back arrangement, according to company sources.
 
The company was in advanced negotiations with two Kuwait-based petrochemical companies, Boubyan Petrochemical Company and Al Qurain Petrochemicals Industries to set up two medium-scale joint venture projects in Kuwait.
 
It is estimated that India would require 36 million tonne per annum of urea, the most common fertiliser, as per the 11th plan. The output from major manufacturers is only to the tune of 24 MT per annum. The government directive is to explore all options to bridge this gap, said sources.
 
TEAMING UP
 
  • RCF-GAIL JV to set up Rs 2,400 crore coal gas fired fertiliser plant
  • Move part of directive to switchover to cheap fuels
  • Techno-feasibility studies done earlier favoured Talchar
  • RCF also reviving its brown field Talchar plant
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    First Published: Nov 14 2007 | 12:00 AM IST

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