GAIL to supply gas for UVL, NFL plants

Written by Economy Bureau | New Delhi | Updated: Feb 28 2009, 05:29am hrs
GAIL (India) Ltd on Thursday signed term sheets for the supply of natural gas to the Barauni plant of Urvarak Videsh Ltd, and Bhatinda, Panipat and Nangal plants of National Fertilisers Ltd.

The move is expected to reduce the Centres fertiliser subsidy burden by about Rs 700 crore annually and also improve fertiliser availability in the vicinity and bridge the demandsupply gap of urea in Bihar, as well as give a boost to agricultural and economic development in the region. It will also reduce the import of urea and increase self-reliance in the urea sector, Union minister for chemicals and fertiliser, Ram Vilas Paswan, said after the signing in ceremony

According to the term sheets, GAIL will supply 2.11 mmscmd gas to the Barauni plant and 0.88 mmscmd, 0.87 mmscmd and 1.03 mmscmd for NFL Panipat, Bhatinda and Nangal plants, respectively. The initial supply date in the case of Barauni is Oct 2012-June 2013 and June 2012 - December 2012 in the case of NFL Fuel Oil conversion plants. The changeover of feedstock from fuel-oil to natural gas is estimated at a cost of Rs1150.75 crore for each unit of NFL, reducing energy consumption considerably.

The contract period is 15 years from the date of commencement of supplies. Gas for the supply will be sourced from sources such as KG Basin block, Nelp blocks and RLNG . While gas will be supplied to the Barauni plant through GAILs 1400 km- lines, including spur lines Jagdishpur-Haldia pipeline to be laid at an investment of about Rs. 7000 crore, NFL plants will be supplied gas through GAILs 610 km Dadri-Bawana-Nangal pipeline to be laid at an investment of Rs. 2500 crore. The 32 mmscmd Jagdishpur -Haldia pipeline will open up energy corridor for major industrial use by other fertiliser plants and steel plants along the pipeline route.

The revival of the Barauni unit by Urvarak Videsh Ltd co-promoted by RCF, Kribhco and NFL is scheduled to be completed by 2012-13. The conversion of NFL plants is scheduled to be complete by 2011.

The Centre had accorded approval for revival of the Barauni unit of Hindustan Fertiliser Corporation Ltd in October, 2008 through a special purpose vehicle promoted by NFL, RCF and KRIBHCO as joint venture company christened Urvarak Videsh Ltd.