GAIL to take 5-10% stake with RCF in Talcher fertiliser plant

NEW DELHI: State-owned gas utility GAIL India Ltd may take 5-10 per cent stake in Rashtriya Chemicals and Fertilizer Ltd's ( RCF) urea and ammonium nitrate plant at Talcher in Odisha.


Originally, RCF, GAIL and Coal India Ltd ( CIL) came together for a Rs 10,000-crore project to convert coal in Talcher mines into gas and then use it as feedstock for manufacturing urea and power.

"Talks are going on with GAIL, and we would like them to be the part of the project," RCF Chairman and Managing Director R G Rajan told PTI.

However, GAIL has not been very keen on being part of the urea and ammonium nitrate plant as fertiliser manufacturing is not its core business. It wants to be restricted to upstream element of the project, i.e. coal gasification.

GAIL wants to take a minimum 50 per cent stake in the Rs 3,000-crore upstream coal-gasification project that will produce enough natural gas to not just fire the fertiliser plant but also a captive power plant. Also, the captive power plant would generate surplus electricity which would be sold to the grid.

Rajan, who had worked in GAIL for 21 years before being appointed Chairman and Managing Director of Projects & Development India (PDIL) and then of RCF, has been prodding GAIL to be part of the fertiliser project as well.

Officials said GAIL has agreed to take a small 5 to 10 per cent stake in the fertiliser project where it wants RCF to take the lead.

The total projected coal gasification, power plant and fertiliser unit will be developed as an integrated project and will cost about Rs 10,000 crore. RCF will market fertilisers manufactured at the plant while CIL will take lead in coal mining.

Meanwhile, global tender for the coal gasification project has been extended for the fourth time amid poor response from bidders. RCF is looking at some modifications in the tender.

The production of the Talcher plant, which was owned by Fertilizer Corp of India, was stopped in 1999 by the NDA government because of low efficiency of production.

The talk of a revival started when the UPA government decided to re-open all the closed urea units in the country.

The revival of the unit will reduce the subsidy burden on the government on urea imports.