Four PSUs sign JV pacts to revive Talcher fertilizer facility

To set up a coal gasification-cum-fertilizer complex

From left: Minister for Chemicals and Fertilizers Ananth Kumar, Minster of State for Petroleum and Natural Gas Dharmendra Pradhan and Minister of State for Power, Coal and New and Renewable Energy Piyush Goyal at a press conference in New Delhi on Wednesday. Photo: Kamal Narang

Coal India Ltd. (CIL), the world’s largest producer, and state gas utility GAIL India Ltd., on Wednesday, signed agreements to invest Rs.9,000 crore in a plant to convert coal into gas and use this fuel to manufacture fertilizer.

CIL and GAIL, along with Rashtriya Chemicals and Fertilizers (RCF) and Fertilizer Corp of India Ltd (FCIL), will set up an integrated coal gasification-cum-fertilizer and ammonium nitrate complex at Talcher in Odisha by 2019, Fertiliser Minister Ananth Kumar said after the four firms signed joint venture agreements.

Upstream consortia

The plant will be built by the two joint ventures — the upstream consortia for converting coal into synthetic gas or syngas, and the downstream plant to manufacture urea and other fertilizers.

GAIL will hold 35 per cent in the upstream venture, called GAIL Coal Gas (India) Ltd. FCIL will take 11 per cent interest while RCF and CIL will pick up 3 per cent each.

The balance 48 per cent will be given to technology provider and financial institutions.

Downstream venture

The downstream venture, Talcher Chemicals and Fertilizers Ltd., would be led by RCF and CIL with 40 per cent stake each while GAIL and FCIL will take 10 per cent each. The plant would manufacture 1.3 million tonnes of urea and other fertilizers annually, the Minister said.

“India is deficit in urea production. At present, we produce about 22 million tonnes of urea, and there is a gap of 10 million tonnes.

“By the time NDA completes its first term, India should become self-reliant,” he said adding that besides reviving the Talcher plant, plans were afoot to revive units at Gorakhpur, Barauni, Sindri and Ramagundam.

Oil Minister Dharmendra Pradhan said the upstream venture would cost Rs.3,000 crore, while the downstream fertilizer plant would be set up at a cost of Rs.6,000 crore.

Two coal blocks had been earmarked for the project — of these one has been allocated and the other has been kept as reserve, he said. The price of gas made from coal will be around $6.5 per million British thermal unit. This is compared to $5.61 per mBtu price fixed for domestically produced conventional natural gas.

Power Minister Piyush Goyal said the use of coal gasification technology for production of fertilizers would lead to annual subsidy savings of Rs.3,000 crore.

“We are working on reviving closed fertilizer plants using coal gasification or other cost effective technologies to increase the domestic production of urea. We aim to become a net urea exporter by March 2019,” Mr. Kumar said.