Fertiliser consortium shortlists Iranian partner for urea plant

Indian fertiliser companies have shortlisted a subsidiary of Iran's Bank Pasargad for jointly setting up a urea manufacturing plant at Chahbhar in Iran. A consortium of state-owned Rashtriya Chemicals and Fertilizers (RCF), Gujrat Narmada Valley Fertilizers & Chemicals (GNFC) and Gujarat Chemicals and Fertilizers (GSFC) looks to set up a gas-based urea/ ammonia making plant in Iran. The plant proposed to use cheap gas supplied by Iran to manufacture crop nutrients for export to India. The consortium has selected private sector Pasargad Energy Development Company (PEDC), which owns land in the Chahbhar region, for a joint venture, sources said.

PEDC is a subsidiary of Bank Pasargad. The proposed project would have 1.3 million tonnes annual capacity of urea which would be imported to India. According to a source the final decision could be made during the proposed visit of Narendra Modi to Iran this month with an aim to bolster overall bilateral ties. 

"A delegation led by CMD, RCF has visited Iran and had detailed discussion with potential joint venture (JV) partners and shortlisted PEDC, an Iranian company, having land in the Chahbhar region, as a JV partner for the above project," the Department of Fertilizers said in its annual report.

The Indian consortium has forwarded a draft MoU to the PEDC for comments, it added. Pasargad Energy Development Company (PEDC) is a private firm, which mainly have investments in energy sector and related fields. Meanwhile, according to the report, the Iranian government has indicated gas price of $2.9 per mmbtu for the project, which is cheaper than the price prevailing in the domestic market and informed that they are trying to fix an uniform price. 

The Iranian government has also informed that the availability of gas for a long term is not an issue, it added. India's annual urea demand is about 30-31 million tonnes, while the domestic production is 23-24 million tonnes, the rest is met through imports. Besides urea, the country's dependence on import in case of Phosphates is to the extent of 90 per cent and 100 per cent in Potash. 

The government has been encouraging Indian companies to establish joint ventures abroad in countries which are rich in raw materials required for fertiliser production and with buy -back arrangement. At present, the domestic companies have 5 joint ventures offhore -- OMIFCO 

in Oman, ICS Senegal in Senegal, JPMC-IFFCO in Jordan, IMACID in Morocco and TIFERT in Tunisia. 

Meanwhile, on Sunday keen on strengthening ties with Iran, the government has allowed National Iranian Oil Company (NIOC) to buy office in Mumbai and is processing requests to allow three of its banks to open branches in the country.

With the lifting of international sanctions, major economies including China and Korea are courting Iran, which has the world's second-largest gas reserves after Russia. Not to be left behind, India too is keen to raise its engagement with a nation which once was its second biggest oil supplier. Prime Minister Narendra Modi is likely to visit Tehran shortly to bolster ties. "Permission has been granted to NIOC for purchasing property for an office," a finance ministry official said.