CIL, NTPC, IOC's Rs 21,000 cr fertiliser project takes off
New Delhi   24-Aug-2018

The Rs 21,000 crore mega fertiliser project of Hindustan Urvarak & Rasayan, a three-way joint venture between Coal India Ltd (CIL), NTPC and Indian Oil Corp (IOC), has finally taken off. The ambitious project to demolish three old coal-based fertiliser plants and use natural gas from GAIL''s upcoming Urja Ganga pipeline has secured ammonia technology to be implemented by a French company, for which a pact was signed this month. And with Urja Ganga construction in full swing, the construction of three fertiliser plants has started.

"This month, there have been several important developments regarding the project, which have helped secure technologies as well as financial support," a source associated with the project said. Earlier this month, Hindustan Urvarak''s key contractor, TechnipFMC of France, gave the mandate for the crucial technology for ammonia to Danish company Haldor Topsoe for two of the three gas-based ammonia plants being constructed. Also, this month the Cabinet Committee on Economic Affairs approved a proposal to grant Rs 1,257.82 crore interest-free loan for the construction period. The loan is to be disbursed during the first three years of construction currently in progress while repayment is spread over 11 years. Hindustan Urvarak was created for setting up gas-based ammonia-urea complex by dismantling the closed plants of Fertiliser Corp at Gorakhpur in Uttar Pradesh and at Sindri in Jharkhand and Hindustan Fertiliser''s plant at Barauni in Bihar.

The capital cost of Rs 21,000 crore is being funded with a debt-to-equity ratio of 75:25 by promoters CIL, NTPC and Indian Oil, each of them owning 29.67% in the project. The rest 11% is with Fertiliser Corp and Hindustan Fertiliser. In 2016-17, pre-feasibility studies were conducted to set up 1.27 million tonne per annum (mtpa) capacity urea plant at all three locations and the projects are expected to get completed by FY21, Coal India has said in its annual report. "All the pre-project activities have been completed at all the three sites. Term-sheet has also been signed with GAIL for the supply of gas through their upcoming Jagdishpur-Haldia-Bokaro-Dharma natural gas pipeline. All the three plants are scheduled to come in operation by FY21," the report said. The section of the pipeline which will supply gas to Gorakhpur and Barauni is scheduled to be completed by December 2018, while the section supplying gas to Sindri is scheduled for completion by December 2019. Any delay in completion of these pipelines will expose the projects to feedstock availability risks, rating agency Icra has said.