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Petronet cuts LNG supplies from Qatar by one-third-I: Take-or-Pay obligations to be determined later.  Petronet cuts LNG supplies from Qatar by one-third-II: Tables Have turned .  Petronet cuts LNG supplies from Qatar by one-third-III: Investigate irregularities that bled the nation tens of billions of dollars, says former Principal Advisor.  Rama Phosphate set to expand capacity.  Brief.  Urea subsidy bills: Freight bills unpaid due to non-availability of funds.  Proposals for new fertilizer plants: Details.  Fertilizer data.  Spurt in raw material imports .  FAI organizes an annual seminar.  Lessons for India: Untargeted energy subsidies do not benefit the poor, says a World Bank study.  A report on the US gas industry: A must-read for anyone involved in the gas business in India.  News Briefs-II.  News Briefs-I.  IFFCO's Phulpur plant undertakes an energy efficiency plan-II: Details.  IFFCO's Phulpur plant undertakes an energy efficiency plan-I: Rs 976 crore to be invested.  Ramagundam fertilizer complex gets environment clearance.  Shortage of fertilizers in 2014-15: DOF claims there was adequate availability.  IFFCO's Aonla plant undertakes an energy efficiency plan-I: Rs 758 crore to be invested.  Urea sales: Adequate availability is there, says DOF, no change envisaged in import structure.  
Petronet cuts LNG supplies from Qatar by one-third-I: Take-or-Pay obligations to be determined later
Jul 30: The Take-or-Pay obligations resulting because of a cut in LNG supplies by Petronet LNG Ltd (PLL) from Qatar will be determined alter the close of the calendar year (CY) as per the contractual provisions under the Iong-lerm contracts which PLL has signed with RasGas.
8Petronet has a 25-year deal with Qatar`s RasGas to buy 7.5 million tonnes of LNG annually. But because of the low gas prices in the spot market R-LNG off-take by PLL under the long-term sales contracts was around 63% of the quantity planned for the six months ended June 30, 2015, against the agreed Annual Plan for the Calendar Year (CY 2015).
8The price of LNG from Qatar comes close to $13 per million British thermal unit as compared to the $6-7 rate at which it is available in the spot or current market.
8In other words, spot LNG prices are about $6-$7 (per mBtu) cheaper than those under the long-term deal so customers are not willing to pay higher prices for the gas offered under the long-term deal.
8Prior to 2009, the long-term deal included a rebate in order to stimulate India`s gas demand, but with the discount now gone the spot market has become more attractive.
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Petronet cuts LNG supplies from Qatar by one-third-II: Tables Have turned
Jul 30: Clearly, Petronet LNG is unwilling to keep buying expensive gas from Qatar anymore given the sharp difference between the spot price and the long term contract price
 
8Take or pay obligations can be invoked by RasGas but clearly the Indian company is willing to take the risk as it continues to reduce its exposure to high cost LNG
 
8Petronet in turn is pushed by the bulk buyers -- in this case GAIL, IOC and BPCL -- who are finding it difficult to deal with irate Indian customers who are unwilling to pay such a high price for gas when spot gas is significantly cheaper.
 
8Petronet's conduct is technically not a breach of contract with RasGas as take or pay accounting is meant to be done at the end of the calendar year.
 
8When it comes to the other way round, Gulf countries too break contracts as was evident when Oman insisted on a gas price increase right in the middle of a 15-year deal to supply gas at $0.77/mmbtu to OMIFCO, a JV between the Oman Oil Company and two fertilizer cooperatives, Iffco and Kribhco.
 
8Oman in 2012 demanded that the price of gas be raised by $0.5/mmbtu every year up to a ceiling of $3/mmbtu.
 
8The Omanese were adamant, claiming that the price rise has to happen regardless of the agreement.
 
8The Oman government cited the firming up of international prices to enforce a higher price.
 
8In the face of an obstinate Oman, the Indian government had no option but to agree to the price hike. 
 Comment: It must be remembered that when crude prices were high, spot gas prices were significantly higher than the long contract price of LNG that Petronet LNG recieved from RasGas. This was because there is a ceiling on the crude price which is indexed to the LNG price. Now that the tables have turned, it may not be fair for Petronet LNG to throw in the towel.  It is also not the Indian company's argument that it is reneging on the take or pay agreement because. for the time being, all that it is doing is postponing the impact of the take or pay clause until the end of the calendar year when books will be tallied. 
  Details
Petronet cuts LNG supplies from Qatar by one-third-III: Investigate irregularities that bled the nation tens of billions of dollars, says former Principal Advisor
Jul 30: Petronet LNG Ltd seems to be attracting some critical attention of late.
 
8On April 27, 2015, the petroleum and natural gas minister informed Parliament that Petronet LNG was being investigated for alleged irregularities in gas purchase contracts.
 
8In an article written earlier this week, Surya P Sethi,  former Principal Advisor for Power and Energy in the Government of India, has alleged that Petronet has indulged in massive irregularities since inception. These irregularities have cost the nation tens of billions of dollars.
 
8Sethi goes on to claim that the company had entered into dubious contracts at the behest of vested interests that benefit from keeping Indian LNG import prices high.
 
8"Establishing mala fides would provide Government of India the legal basis for renegotiating these contracts," insists Sethi
 Click on Details to find out more on the specific charges levied by Sethi.
  Details
Rama Phosphate set to expand capacity
Jul 30: Rama Phosphate Ltd is planning to expand its SSP capacity from 181,000 TPA to 315,000 TPA, GSSP from 66,000 TPA to 300,000 TPA at Umra, Rajasthan.
 
8The company is also planning for a greenfield 25,000 TPA Boronated SSP complex that will also house a 20,000 TPA LABSA. unit
 
8Company sources said that project had elicited environment clearance on 18 September 2014 but an amendment to the clearance is currently awaiting clearance.
 
8The expansions are to be completed by September 2017.
 The following amendments in the earlier EC are being proposed:
 
8Expand the capacity of Boronated SSP from 25,000 TPA to 75,000 TPA.
 
8Set up new unit of 75,000 TPA Zincated SSP.
 
8The total projected cost will be Rs  50 crore.
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Brief
Jul 30:  Gujarat State Fertilizers & Chemicals (GSFC) witnessed a fall in share price on Wednesday after posting a marginal decline in standalone net profit for the quarter ended June 2015. During the quarter, the profit of the company declined 6.77% to Rs 1,009 million from Rs 1,082.30 million in the same quarter last year. 
 8
Revenues for the quarter declined 12.77% to Rs 10,844.80 million, compared with Rs 12,432 million for the prior year period. Operating margin for the quarter stood at 12.16 percent as compared to 11.10 percent for the previous year period. Operating Income for the quarter was Rs 1,318.20 million, compared with Rs 1380.4 million in the previous year period.
 8
Shares of Gujarat State Fertilizers & Chemicals are trading at Rs 74.95, down Rs 0.3, or 0.40% at the Bombay Stock Exchange (BSE) on Wednesday at 10:10 a.m.
 8
The scrip has touched an intra-day high of Rs 76 and low of Rs 74. The total volume of shares traded at the BSE is 52,058.
Urea subsidy bills: Freight bills unpaid due to non-availability of funds
Jul 29: The following is the latest status, as put out by the DOF, on payment of subsidy to urea manufacturers:
 
Details of unpaid
bills in respect of indigenous urea
 -- Regular subsidy:
Bills upto May, 2015 have been paid. Bills for the month of June, 2015 will be payable in August, 2015. As on date funds are available under the budget head: Nitrogenous Fertilizer (NF).
 -- Freight Bills: Bills upto January, 2015 have been paid. Bills from February, 2015 to June, 2015 worth of Rs 748.71 crores are pending due to non availability of sufficient funds under budget head: Freight Subsidy (FS).
 -- IPP Payment for 2012-13 and 2013-14:
Bills worth of Rs 720 crores are under process for payment.
 -- 5 % balance claims: Bills worth of Rs 2175.61 crores are yet to be paid because manufacturers have not submitted quality certificates.
 
Details of unpaid bills in respect of imported urea
 --
Inland freight: Bills worth Rs 473.79 crores are pending due to incomplete bills submitted by companies.
 -- Others: Bills worth Rs 6.63 crores are under process for payment.
  Details
Proposals for new fertilizer plants: Details
Jul 29: For reference purposes, the website carries here the list of companies who had evinced interest in setting up ammonia-urea complexes in the country.
 --The data is given, in terms of the name of the company, the project involved and the state in which it is meant to come up, in the following format:
--Proposals received under NIP – 2012 during the year 2012-13 & 2013-14 (A total of 15 projects)
--Proposals received separately during the year 2014-15 (Two projects)
--Proposals received under amendment to NIP – 2012 during the year 2015-16 (Five projects)
 Click on Details for more
  Details
Fertilizer data
Jul 29: For reference purposes, the website carries here the following data on fertilizer imports:
--
Year-wise, quantity-wise of urea imports from OMIFCO and from State Trading Enterprises in terms of volume and value, along with domestic production of urea. The data is available up to June, 2015.
--
Consumption data for urea is tabulated too over the last three years.
--
The data is also given on the year-wise import of DAP, NPK and MOP as well as domestic production of the nutrients
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  Details
Spurt in raw material imports
Jul 29: The DOF has claimed that there has been a sharp spurt in the import of gypsum, rock phosphate and sulphur in 2014-15.
 -- Import of gypsum has gone up from 32.31 lakh tonnes to 44.21 lakh tonnes
 -- Rock phoshpate imports went up to 82.58 LMT from 71.60 LMT
 -- Similarly gypsum saw a spurt to 16.26 LMT from 12.89 LMT
 
8In the meanwhile, the DOF has clarified that there is no proposal toconstitute a consortium of public and private companies to garner fertilizer assets abroad
 -- However, the government has been encouraging Indian Companies to establish Joint Ventures (JVs) abroad in Countries which are rich in fertilizer resources for production facilities with buy back arrangements and to enter into long term agreement for supply of fertilizers and fertilizer inputs to India 
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  Details
FAI organizes an annual seminar
Jul 28: The Fertilizer Association of India (FAI) will organizes an annual seminar in December 2015.
 8The key agenda of this seminar will be the following :
 -Outlook for Global Fertilizer Demand and Supply.
 -Unshackling Fertilizer Sector.
 -Policy issues of P&K Sector.
 -Analyst View Regarding International Price Trends.
 -Availability and Price of Natural Gas.
 -Soil Resources and Sustainable Development.
 -Fertilizers and Soil Health.
 -Harnessing Potential of Soil Microorganisms.
 -Sustainable Soil Management: Industry Initiatives.
 -Energy Efficient and Environment Friendly Catalysts for Ammonia Plants.
 -Technologies for Improvement in Operational Efficiency of Ammonia Plants.
 -Improving Reliability of Urea Plants Optimizing.
 -Operation of Complex Fertilizer Plants.
 -Environmental Considerations in Fertilizer Production.
 -Evolving Marketing Strategy.
 -Promoting Innovative Fertilizers.
 -Direct Subsidy to Farmers.
 -Valedictory Session.
 Click on our Report section for more information.
Lessons for India: Untargeted energy subsidies do not benefit the poor, says a World Bank study
Jul 28: There are lessons to be learnt from a recent World Bank study that claims that untargeted untargeted energy subsidies reduce the amount of money that can be spend on programs that really benefits the poor.
8At the global scale, fuel subsidies to consumers are estimated at more than US$ 300 billion annually.
8Out of this total, road sector subsidies are estimated at US$ 110 billion, resulting in a global welfare loss of US$ 44 billion or even double as much, if externalities are taken into account.
8World Bank also argues that subsidies on electricity and petroleum products have contributed significantly to the inefficient use of energy like in India where subsidies on HSD and petrol had resulted in a spurt in demand for the product.
8Then again, fuel subsidies have proven to be dis-proportionally beneficial to the wealthier citizens, which consume relatively larger amounts of fuel to power their automobiles and homes. In India, the proliferation of diesel SUVs is an example.
8Indonesia is an example of how oil subsidies can be removed successfully, like it did in 2005. This was accompanied by a carefully designed cash-transfer program that targeted the poor among the affected household groups.
8This is exactly what India is planning to do now, but it will take a while before the entire exercise becomes a success.
  Details
A report on the US gas industry: A must-read for anyone involved in the gas business in India
Jul 28: The US shale gas market is evolving at a very rapid pace on account of increasing financial intermediation and technological developments.
8In the past decade the processes for finding geological formations rich in shale gas, or shale plays, have improved to the point that new wells almost always result in natural gas production.
8Shale gas well productivity has improved geometrically over the past 10 years resulted in larger amounts of shale gas production at lower natural gas prices.
8The gas market in the US has become more sophisticated and different kind of contracts are now available.
8Intermediaries now play an increasingly important role and there is now space available for various players to work in different aspects of the entire LNG chain.
8For reference purposes, the website carries here a 128 page report outlining the shale gas revolution in the US in terms of how it began and where it is headed along with a very detailed overview of the energy markets in the US.
8This is a must-read for anyone involved in the gas business in India, either as a supplier or as a buyer of gas for developments in the US market will eventually determine the fate of the global gas industry in the coming years.
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  Details
News Briefs-II
Jul 28: The website carries here the following briefs:
 
8District wise micro nutrient deficiency in Karnataka and steps being taken to address the issue of nutrient deficiency.
 
8Adequacy of demand and supply of fertilizers in Odisha
 
8Available stocks and anticipated demandfor fertilizers in Andhra Pradesh and Telangana
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  Details
News Briefs-I
Jul 28: Coromandel International Ltd, the fertilizer company controlled by The Murugappa Group, said its net profit fell 55% in the quarter ended 30 June because of erratic rainfall and higher expenses.
 
8Coromandel reported a net profit of Rs.15 crore in April-June, compared to Rs.33 crore in the same period last year, on consolidated basis. Revenue rose 16% to Rs.2,881.2 crore.
 
8Expenses increased by 19% to Rs. 2,115 crore. “Erratic rainfall in key addressable markets coupled with cost push pressures, and rupee depreciation have impacted agri-input sales and margins,” said V. Ravichandran, vice-chairman of Coromandel.
 
8The company has taken adequate measures to face market challenges and will continue to focus in meeting the customer needs by providing quality inputs, besides offering advisory services,” Ravichandran said.
 
8Coromandel International informed the stock exchanges that its board has elected independent director Uday Chander Khanna as its chairman.
 
8Khanna replaces A. Vellayan, who has been charged, along with three others, with insider trading by Securities Exchange Board of India (Sebi), the country’s capital markets regulator.
 
8On 22 May, Vellayan stepped down from the post of chairman of all Murugappa Group companies, including Coromandel.
 
8The regulator charged Vellayan with passing on unpublished price-sensitive information on the acquisition of Sabero Organics Gujarat by group company Coromandel International to some individuals, who traded in the shares of Sabero on the basis of that information.
 
8Vellayan is contesting the charges of insider trading.
 
8Rashtriya Chemicals and Fertilizers Ltd has informed that it intends to dispatch the Dividend Warrants, for the year ended March 31, 2015, to its Shareholders on September 02, 2015, subject to the approval of the same by the Shareholders in ensuing Annual General Meeting scheduled to be held on August 27, 2015.
IFFCO's Phulpur plant undertakes an energy efficiency plan-II: Details
Jul 27: The following changes will be made to plant and equipment under the efficiency drive:
8Phulpur-I plant
8Ammonia unit:
 -Installation of New Air Compressor Turbine & New Refrigeration Turbine.
 -Installation of New back pressure Turbine.
 -Modification in CO2 Recovery Process.
 -Installation of Fuel gas Expander with inter and after pre-heaters and bypass arrangement.
 -Installation of VAM for Process Air Compressor Suction Chilling.
 -Ammonia Recovery from Synthesis Loop LP Purge Gases.
 -Installation of MP Stripper for Process Condensate Stripping.
 -Synthesis Gas Converter (105D) Revamp.
 -Saturated MP Steam Export from Synthesis Loop to Urea Plants.
 -New Parallel Methanator Effluent cooler (115-c) & BFW Header (145-C).
 -Installation of new Ammonia storage tank (double wall double integrity), Capacity: 10,000 MT.
8Urea unit:
 -Utilization of waste heat to Heat Feed Ammonia to Urea Converter.
 -Installation of VAM for Urea CO2 Compressor Suction Chilling.
 -New Urea Reactor Trays.
 8Phulpur-II plant
 8Ammonia unit:
 -Revamping of Synthesis Gas Compressor.
 -Modification in CO2 Recovery Process.
 -Ammonia wash (syn gas drying) in synthesis compressor inter-stage and loop reversal.
 -Installation of Fuel gas Expander with inter and after pre-heaters and bypass arrangement.
 8Urea unit:
 -
Revamping of CO2 Compressors.
 -Utilization of waste heat to Heat Feed Ammonia to Urea Converter (2 Nos.).
 -New Urea Reactor Trays (2 Set).
 Click here on our Report section for more
IFFCO's Phulpur plant undertakes an energy efficiency plan-I: Rs 976 crore to be invested
Jul 27: Iffco is embarking on a Rs 976 crore energy efficiency project in its Phulpur I & II plants in Uttar Pradesh.
8This scheme will lead to savings of 0.109 MMSCMD of Natural gas, 525 MTPD of Coal and 2760 CMPD of Water.
8The combined existing capacity of ammonia and urea are 2955 MTPD and 5145 MTPD respectively.
8The specific energy consumption of urea is about 5.84 Gcal/MT and this is sought to be brought down to 5.24 GCal/MT of urea.
8The existing 12.5 MW Turbo Generator will be replaced by a GT-HRSG co-generation plant of 23 MW, with 11 KV and 60 MT/hr HP Steam at 116 bar g pressure and 520+/-5 degree C temperature.
Click here on our Report section for more
Ramagundam fertilizer complex gets environment clearance
Jul 27: The Ramagundam ammonia/urea fertilizer complex, being promoted by the consortium of Engineers India Ltd, NFL and FCI at Telangana, has elicited an environment clearance for production of urea and ammonia with capacities of 3850 MTPD and 2200 MTPD respectively.
 8Along with the plant,a  captive power complex with capacity of 29 MW (Normal) /34 MW (Max) (GTG+HRSG) will also be installed
 8The environment clearance for the project was granted on 17 June 2015.
 8The project is likely to be completed by the end of the year 2018.
  
Shortage of fertilizers in 2014-15: DOF claims there was adequate availability
Jul 27: There was a shortage of fertilizers last year but the government claims that availability was in fact more than sales.
 8The requirement of urea was 306 LMT, against which availability was 310 LMT while sales were at 308 LMT
 8As far as DAP, MOP and NPK are concerned, the projected requirement was 226 LMT, whereas availability was 199 LMT and sales was 189 LMT.
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  Details
IFFCO's Aonla plant undertakes an energy efficiency plan-I: Rs 758 crore to be invested
Jul 24: Iffco is embarking on a Rs 758 crore energy efficiency project in its Aonla I & II plants in Uttar Pradesh.
8This scheme shall lead to savings of 0.279 MMSCMD of gas and 500 CMPD of water.
8The combined existing capacity of ammonia and urea units are 3450 MTPD and 6000 MTPD respectively.
8The specific energy consumption of urea in Aonla I and Aonla II are 5.529 Gcal/MT and 5.527 Gcal/MT respectively,  and this is sought to be brought down by 0.358 Gcal/MT and 0.396 Gcal/MT of urea in Aonla I & II.
8The combined capacity of existing captive power plant is about 36 MW.
Click here on our Report section for more
  Details
Urea sales: Adequate availability is there, says DOF, no change envisaged in import structure
Jul 24: The DOF has claimed that it has pre-positioned an extra 24.80 LMT of urea than the requirement for February and March, 2015 so as to ensure adequate availability during Kharif, 2015.
 8Gross sales figures seem to show, according the DOF, that there is adequate availability of urea.
 8All India availability is around 97.69 LMT against sales of 70.20 LMT for April-June, 2015.
 8Meanwhile, the government has reconfirmed that there will not change in the cannalizing structure for the import of urea.
 8The agencies that will be import urea are going to be MMTC, STC and IPL and no modification to this matrix is envisaged for the time being.
  Details

Jul 24: New urea capacity: Six private companies have evinced interest  Details
Jul 24: IFFCO's Aonla plant undertakes an energy efficiency plan-II: Details  Details
Jul 23: PNGRB imposes penalty on GAIL for pipeline blast  Details
Jul 23: Fertilizer data  Details
Jul 23: Bio-fertilizers: Subsidies make manufacture viable  Details
Jul 23: Non-comforming fertilizer samples: Wide variation across states  Details
 
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