Fertilisers and Chemicals Travancore Limited (FACT) has decided to go in for spot purchase of LNG from Petronet LNG terminal on Puthuvype Island, which received its first consignment of gas early last week.
The public sector company will buy the gas at approximately $19 per mmBtu and will wait to see if the government offers some financial support. The company has appealed to the State government to waive value added tax (VAT) on the price of the gas, which comes to 14.5 per cent, said a press release issued here on Saturday.
FACT will buy gas from the terminal over the next 60 days and will go in for a gas transmission agreement with GAIL India, IOC and BPCL for the purpose.A long-term agreement for purchase of natural gas would depend on ensuing discussions with the companies involved, the release added.FACT has already completed the conversion work at its ammonia plant for the feedstock switch from naphtha. The statement from FACT said switching over to natural gas would be a major milestone for the company.
