Rashtriya Chemicals & Fertilisers Ltd (RCF) is planning to sign an agreement with British Gas for supply of gas to meet its fleet stock needs.
RCF chairman and managing director D K Verma told newspersons that the company's requirement of LNG was about 1.5 million tonnes per annum. As per its existing agreement with Enron, LNG supply should have already began from Dabhol to its Thal plant in Maharashtra.
Enron's requirement for power generation was only about 2./5 million tonne and the remaining was to be sold to third parties including RCF. The RCF, CMD said that these supplies now faced an uncertain future, because of the stand-off between MSEB and Enron.
Asked if it would lead to a termination of the agreement with Enron, he said "We still need LNG. If supply is available from Dabhol we will pick it up," he said in reaction to a question on whether it would lead to a termination of RCF's agreement with Enron.
In addition to this supply, British Gas is also expected to supply another 1.7 million tonnes to the Trombay plant of RCF. This requirement was in view of the capacity expansion that has been proposed for the urea plant of RCF.
"The capacity of the urea plant is to be raised from 2.3 million tonne from the production level of 1.5 million tonne." This expansion is expected to cost at least Rs 1,400 crore, of which Rs 800 crore would be funded from RCF's cash reserves, he said.
The debt component is expected to be raised from ICICI. The company he said was also preparing to expand DAP in Rajasthan for Rs 300 crore.
This 4 lakh tonne per annum plant was being set up with 25 per cent equity support each from Hindustan Zinc and the Rajasthan Mines and Minerals Corporation. The remaining 50 per cent would be held by RCF itself.
Verma also said that the final decision of the expansion of the urea plant would be taken by the board of the company only after the interim fertiliser policy announcement to be announced by the Centre.
The policy is expected to provide an interim measure of fertiliser pricing and prepare the industry for complete dismantling of the retention pricing mechanism.
