The Hindu : Andhra Pradesh News : NFCL to completely switch over to natural gas

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Sunday, Apr 12, 2009
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Andhra Pradesh

Andhra Pradesh

NFCL to completely switch over to natural gas

Staff Reporter

The company is in a position to increase its production

Kakinada: The Nagarjuna Fertilizers and Chemicals Limited (NFCL) is set to completely switch over to natural gas as the source of energy consequent upon the supplies from KG basin by Reliance Industries Limited (RIL), which commenced on Thursday last.

Hitherto, NFCL has produced nitrogenous fertilizer i.e urea with only the first one of its two manufacturing units, whose combined capacity is six lakh metric tonnes, using gas sourced from public sector Gas Authority of India Limited (GAIL).

Due to covering of the natural gas deficit by RIL, NFCL is in a position to increase its annual production by two lakh metric tonnes with the second unit also running on gas instead of naphtha, according to company sources.

The present supplies from GAIL have been depleting and the fertilizer industry has been using naphtha to meet the fertilizer requirements. The Government of India is importing large quantities of urea at high costs (around 6 million MTs of urea was imported in 2007-08).

This situation is poised to get better with RIL meeting a good part of the requirement of fertilizer manufacturers. NFCL has entered into a five-year Gas Sales and Purchase Agreement (GSPA) with RIL and Gas Transportation Agreements (GTAs) with both Reliance Gas Transportation Infrastructure Limited and GAIL to get the gas deliveries. NFCL is currently receiving 1.549 million metric standard cubic meters of gas per day.

According to NFCL Vice-President R.D. Mall, the total operations of the company will be switched over to gaseous inputs and naphtha usage will be stopped on completion of the ongoing revamp/de-bottlenecking schemes.

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