First liquid ammonia shipment reaches Kochi port

The first shipment of imported liquid ammonia has reached Kochi Port to enable fertiliser production process of the public sector FACT, following its decision to suspend ammonia production using LNG.

The spiralling cost of natural gas had forced the fertiliser company to temporarily suspend ammonia production. Liquid ammonia is one of the important raw materials used by FACT to produce NPK fertiliser.

The first consignment of 7,500 tonnes of liquid ammonia reached the Port from West Asia and will be moved to production units of Udyogamandal and Ambalamedu by road and waterways. One more shipment of similar quantity is expected in the first week of February. As LNG prices are touching $ 24.35 per MMBTU, it would be viable for the company to import ammonia rather than depending on internal production, a senior official told Business Line .

The current imports to meet production requirements will be only for a temporary period and will switch over to natural gas as feed stock once LNG prices comes to a right level, he added.

FACT requires ammonia for fertiliser production including Caprolactum and Factamphos, in the range of 70,000-80,000 tonnes in a month.

Moreover, the insistence of Petronet LNG Ltd to purchase the entire consignment of the natural gas had also made the things difficult for the fertiliser company. Out of the full shipment of 80 million cubic metres, he said FACT requires only half of that to meet its production needs for two months.

However, he said that discussions were on to resolve the crisis with Petronet LNG and are expecting a positive response in this regard.

Though FACT expected a favourable decision on deferment of VAT on LNG in the recent Kerala Budget, the proposal finds no mention in the budget papers. It had sought deferring of the tax presently levied at 14.42 per cent for five years.

It may be recalled that employees and officers under the banner Save FACT Action Committee conducted a hunger strike, demanding a fair deal for LNG at the rate at which the gas is available to fertiliser companies in other parts.

The trade and industry in the State also requested the Centre to enforce a national-level pooled price for natural gas by combing all sources of production in the country and imports as in the case of all other petroleum fuels.

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