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Gas pooling price for fertiliser firms by month-end

Gas pooling price for fertiliser firms by month-end

In a first for fertiliser companies, the ministry of petroleum and natural gas (MoPNG), is working on a gas pooling price that would be decided by the end of the month, a senior fertiliser ministry official said.

A notional price would be decided at the beginning of every month and a final price by the end of the month so as to factor in the volatility of crude and gas price. Demand and supply would be dependent on the prevalent price, the official said.

“We have asked for 4.55 million standard cubic metres per day of gas (mmscmd) on spot extra basis for the month of July-August over and above the shortfall faced by 27 companies manufacturing urea. Based on our demand and requirement, tenders would be invited by MoPNG,” the official added.

Fertiliser plants consume about 42.25 mmscmd of gas for manufacture of subsidised urea. Out of this, 26.50 mmscmd comes from domestic fields and the rest 15.75 mmscmd is imported liquefied natural gas (LNG).

The $4.66 per million British thermal unit price of domestic gas is half the cost of LNG that currently stands at around $7.5 per mmBtu. Gas pooling will help save Rs 1,550 crore in subsidy and will benefit 27 urea plants based on gas.

A ministry order said that “domestic gas will be pooled with re-gasified liquefied natural gas (R-LNG) to provide natural gas at uniform delivered price to all natural gas grid-connected urea manufacturing plants for the purpose of producing urea.”

GAIL India is the pool operator that would tie up imports after considering domestic availability and after averaging the price it would deliver the gas at uniform rate to all parts of the country. The department of fertilisers will determine the total requirement of natural gas and draw plant-wide requirement.
vikassrivastav

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