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Business News/ Industry / Energy/  Fertilizer ministry seeks to cut non-urea units off KG D6 gas
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Fertilizer ministry seeks to cut non-urea units off KG D6 gas

The prices of P&K fertilizers are not regulated and there is no logic in offering them cheaper domestic gas, says the official

KG-D6 gas is supplied to P&K plants of Deepak Fertilizers, GSFC and RCF at $4.2 per mmBtu.Premium
KG-D6 gas is supplied to P&K plants of Deepak Fertilizers, GSFC and RCF at $4.2 per mmBtu.

New Delhi: The fertilizer ministry has written to the petroleum ministry to stop supplying gas from Reliance Industries Ltd’s (RIL) KG D6 block off India’s east coast to non-urea or phosphatic and potassic (P&K) fertiliser plants, said a fertilizer ministry official who did not want to be identified.

The official said the prices of P&K fertilizers were not regulated and there was no logic in offering them cheaper domestic gas. “As urea is still a regulated fertilizer, it receives priority," he added.

A PTI report quoted a petroleum ministry official saying, “We received a two-page letter from them (fertiliser ministry) on Friday. We will act on it."

KG-D6 gas is supplied to P&K plants of Deepak Fertilizers, Gujarat State Fertilizer Corp. and Rashtriya Chemicals and Fertilizer (RCF) at $4.2 per million metric British thermal units (mmBtu).

An official from RCF said the company had not received any intimation from the government so far. “We receive the KG D6 gas for our integrated plant in Mumbai that produces both urea and non-urea fertilizers. (We are) not sure if we will be impacted," the official said.

Deepak Fertilizers and GSFC officials were unavailable for comment. RIL did not respond to emailed questions.

The fertiliser industry consumes 31.5 mmscmd of gas from domestic sources and receives top priority in allocation of domestic gas. Presently all 13-14 mmscmd of gas produced from the KG D6 feld is supplied to fertilizer units.

Non-urea fertilizer units that face supply cuts from KG D6 will have to substitute domestic gas with costlier imported liquefied natural gas (LNG). RIL currently has agreements to sell KG D6 gas to 16 fertiliser units. This includes 0.5 mmscmd of gas being consumed by P&K plants. Domestic gas supply to urea plants will continue to be maintained at the current 31.5 mmscmd.

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Published: 06 May 2014, 12:41 AM IST
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