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Zuari Industries Ltd (ZIL) is in the process of acquiring land and obtaining environment clearances for its proposed 1.3 million tonne (mt) gas-based urea plant at Belgaum in Karnataka, involving an outlay of around Rs 5,000 crore.
“We would be getting the gas from Petronet LNG's Dahej terminal. This gas, which will be transported by GAIL India's Dabhol-Bangalore pipeline, goes through Belgaum, where the plant is proposed to be set up,” Mr Suresh Krishnan, Managing Director of ZIL, told Business Line .
The 1,400-km-long pipeline is scheduled to come up by March 2012. “Our idea is to complete the entire groundwork to enable commissioning of the unit in 2015-16, by which time a new fertiliser investment policy will also hopefully be in place,” Mr Krishnan added.
Feedstock conversion
In the meantime, ZIL is also looking to convert the feedstock for its existing 0.4 mt urea unit at Zuari Nagar (Goa) from naphtha to gas. The company claims to have already invested Rs 65 crore towards making the changeover.
“We are now just waiting for the gas to be supplied, for which a take-or-pay agreement has already been signed with GAIL India. We hope to get the gas from January 1, 2012, which will come through a separate 120-km spur pipeline from Belgaum. Even if the gas is imported, it will work out much cheaper than naphtha,” Mr Krishnan noted.
The average production cost of urea from gas-based plants in India was estimated at Rs 8,463 a tonne in 2009-10, against Rs 27,224 from units running on naphtha.
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