Urea Fertilizers ONGC forays into Urea Fertilizer Business
India's Oil and Natural Gas Corporation (ONGC) has inked a Memorandum of Understanding (MoU) with Chambal Fertilisers and Chemicals (CFCL) and the Government of Tripura for setting up a urea fertilizer project in the State
New Delhi/India – ONGC has discovered significant gas reserves in Khubal under NELP acreage AA-ONN-2001/1, located in the logistically challenging north-eastern part of the state of Tripura, which otherwise would be stranded due to poor marketing and evacuation avenues. Therefore, monetization of this gas would be a challenging proposition.
At the same time, the progressively minded State Government is keen on rapid industrial and agricultural development of the State to address the aspirations of its people. In sequel to setting up of ONGC’s gas based power project at Palatana, Tripura through a JV with the State Government, joint venture fertilizer project augurs well with the development agenda of the state administration and the business growth plans of ONGC and its strategic partner M/s CFCL. Identification of M/s CFCL as a strategic partner for this venture was through a transparent selection process on the basis of their long-standing experience and expertise in the fertilizer sector.
Investment opportunity in fertilizer is ripe on more than one account. The new Fertilizer Policy 2012 has several enabling provisions to encourage further investments in the urea fertilizer arena. The gas based fertilizer complex would need allocation of natural gas by the Empowered Group of Ministers (EGoM), Govt. of India, for meeting its feedstock requirement. Since fertilizer ranks topmost in the priority for allocation, the parties are optimistic about getting the requisite gas allocation.