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New Delhi, Aug 8

INDIAN Farmers Fertiliser Co-operative Ltd (IFFCO) today said it has signed long-term fuel supply agreements with GAIL (India Ltd) and Gujarat State Petroleum Corporation Ltd (GSPCL).

Under the agreements signed, GAIL (India Ltd) and GSPCL will help IFFCO switch over to low-cost LNG from naphtha and fuel oil, an IFFCO release said.

"The long-term fuel supply contracts will lead to a cut in the input costs for manufacture of urea and help reduce Government subsidy outgo by Rs 1,130 crore," IFFCO added, without disclosing the value of the deals.

As per the deal, GSPCL will supply regassified LNG to IFFCO's Kalol unit.

Putting the Kalol unit on LNG will lead to a fertiliser subsidy saving of Rs 84 crore annually.

GAIL (India Ltd) will supply regassified LNG to IFFCO's Phulpur unit through a dedicated pipeline stretching 140 km from Tulendi, which will be completed by the beginning of the next fiscal, it said.

IFFCO has already invested Rs 33 crore in its Phulpur unit for using regassified LNG as the feedstock.

Switching to LNG in the unit will entail a subsidy saving of Rs 658 crore for the Centre.

The co-operative said that it has also invested Rs 120 crore to set up two carbon dioxide recovery plants at its Phulpur and Aonla units, each having installed capacity of 450 metric tonnes a day.

(This article was published in the Business Line print edition dated August 9, 2005)
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