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Rashtriya Chemicals and Fertilisers to set up new urea unit in Assam

Rashtriya Chemicals and Fertilisers to set up new urea unit in Assam
The new plant will be energy efficient and produce more than double urea.

Rashtriya Chemicals and Fertilisers (RCF) has accepted the government’s proposal to set up a new urea plant in Assam to cater to North-Eastern states.

InfraCircle was first to report on 21 December that ministry of chemicals and fertilisers was planning to rope in state-run National Fertilizers Ltd (NFL) or Rashtriya Chemicals and Fertilisers (RCF), after it failed to attract private players for setting up an ammonia-urea plant at Namrup in Assam.

In May last year, the government approved setting up of Rs.4,500 crore ammonia-urea plant with 8.64 lakh metric tonnes capacity on a public-private partnership (PPP) basis via a joint venture.

“We were in talks with NFL and RCF for setting up the urea plant at Assam, after private parties showed less interest in it and now RCF has accepted the proposal. Also, the proposal has received nod from the department of fertilisers,” said a senior government official, requesting anonymity, further adding that RCF will hold 52% equity in the project.

Another government official, who did not wish to be named, said the proposal will soon be sent for Cabinet’s approval. “A draft Cabinet note is almost ready and will soon be circulated for inter-ministerial consultations,” the second official quoted above said.

In the proposed JV, Brahmaputra Valley Fertilizer Corp. Ltd (BVFCL), a public sector undertaking (PSU) of department of fertilizers, Assam government and Oil India Ltd were to have 11%, 11% and 26% equity holding respectively, while the remaining 52% was to be with either private or public sector companies, which would have been inducted through a competitive bidding process.

According to information available on the website of department of fertilizers, the new plant will be energy efficient and produce more than double urea, compared with the existing units while consuming the same amount of natural gas.

“BVFCL currently gets 1.72 mmscmd of gas for the urea plant. And it will require a total of 2.34 mmscmd of gas for the project expansion. We have requested ministry of petroleum and natural gas for additional supply of gas,” said a senior executive at BVFCL, adding that the new urea unit will have a capacity of 1.237 million tonnes.

Queries emailed to the ministry of chemicals and fertilizers, ministry of petroleum and natural gas, Assam government, RCF and OIL India on 9 January remained unanswered.

India’s annual consumption of urea is around 31MT, out of which 23 MT is produced domestically, and the rest is imported. To enhance the production of urea indigenously, the government had earlier approved the revival of Talcher (Odisha) and Ramagundam (Telangana) units of Fertilizer Corporation of India Ltd (FCIL) by PSUs through nomination route. However, both these projects have not yet sailed through.

The government has also approved revival of two closed units of FCIL at Sindri (Jharkhand) and Gorakhpur (Uttar Pradesh), and the Barauni (Bihar) unit of Hindustan Fertilizers Corporation Ltd (HFCL) via consortium of PSUs, including NTPC Ltd, Coal India Ltd (CIL) and Indian Oil Corporation Ltd (IOC).


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