K.A. Martin

FACT plants will be ready to use LNG by April-May 2012

FACT, NTPC to sign pact with Petronet LNG

LNG receiving, re-gasification facility by 2012

KOCHI: With LNG supply in Kochi becoming a certainty by 2012, Fertilizers and Chemicals Travancore (FACT) will now begin work on feedstock conversion from naphtha to natural gas.

“We will be ready to use LNG as and when it is available here. And, we will be the first to use the Kochi gas,” George Sleeba, Chairman and Managing Director of FACT, told The Hindu on Tuesday.

The public sector fertilizer company has set up a taskforce to look into the details of the conversion work, which is expected to take up little more than a month once the work begins. The work will cost around Rs.20 crore.

Dr. Sleeba said he foresaw no delays in completion of the conversion process. The only part of the conversion work that might take up time is procurement of parts and accessories.

FACT’s migration from naphtha to LNG will be synchronised with an annual maintenance shutdown, usually carried out in the months of April-May. It is possible that FACT plants will be ready to use LNG by April-May 2012 or even slightly earlier.

In the shift from naphtha to LNG, FACT plants enjoy an advantage because they have been designed for dual fuel use.

FACT and the National Thermal Power Corporation are set to sign agreements later this month with Petronet LNG Limited (PLL) for gas supply.

The LNG receiving and re-gasification facility will be commissioned in 2012.

A top-level meeting convened here on Monday by Prime Minister’s Principal Secretary T. K. A. Nair reiterated that there would be no more delay in commissioning of the LNG facility.

FACT will require 0.66 million tonnes of gas annually and will be the second largest consumer after the NTPC with a projected requirement of 2.1 million tonnes.

The LNG facility in Kochi is being built at a cost of Rs.3,200 crore. It will have a capacity to handle 2.5 million tonnes of gas annually in the first phase. The capacity will be raised to five million tonnes in the second phase.

Dr. Sleeba said that the gas supply agreement with the PLL would take care of future expansion requirements of the fertilizer company even as the company management had visualised reviving the urea-ammonia plant.

The arrival of LNG in Kochi will mark a new era of growth for Kerala’s foremost public sector undertaking as profits are projected to touch Rs.300 crore annually after feedstock conversion.

FACT’s record productivity and capacity utilisation have been nullified over the years by violent fluctuations in naphtha price in the international market.

The signs of good times ahead are already visible with FACT expecting a profit of Rs.40 crore for the last financial year, having achieved a record sales turnover of Rs.2,100 crore. This is the first time in a decade that the fertilizer company is recording profits.

Results for the last fiscal are dazzling given that during the previous year the company had a turnover of Rs. 850 crore.