Government likely to shelve 0.3 million tons of urea import plan
November 06, 2012: The government is likely to shelve its plan to import 0.3 million tons of urea for Rabi season as Petroleum Ministry after consultations with the local fertiliser industry has agreed to supply required gas with the approval of Economic Co-ordination Committee (ECC) of the Cabinet, well informed sources told Business Recorder.
The sources said 39 mmcfd gas will be supplied to Dawood Hercules Limited from SNGPL system whereas Agritech Limited (former Pak Arab Fertiliser Limited) will get 22mmcfd gas from Makori East gas field. The 60 mmcfd gas being supplied to Guddu Thermal Power Station (GTPS) from Mari shallow by curtailing supply to Engro, 11 mmcfd from Maru and Reti Gas field and 9 mmcfd from another source was proposed to be diverted to Engro.
According to OGDCL website, Maru and Reti fields” total reserves are 45.5 BCF. In order to appraise the field, it will be placed on Extended Well Testing (EWT). About 12 MMSCFD untreated gas will be allocated to M/s Engro for their fertiliser plant at Daharki. OGDCL will complete its in-field facilities in January 2012. Gas supply to Engro will be started form Maru-1 to M/s Engro Plant at Daharki after completion of pipeline. This pipeline will be constructed and maintained by Engro.
Recently, Ministry of Industries recommended import of 0. 5 million tons of urea for Rabi but the ECC allowed import of only 0.2 million tons and constituted a committee under the chairmanship of Deputy Prime Minister, Chaudhry Pervez Elahi to probe the matter. The committee held two meetings on two consecutive days in the Prime Minister secretariat and consulted stakeholders including local urea manufacturers. However, the committee”s recommendations are still not known.
Meanwhile, fertiliser sector used its influence to convince the Petroleum Ministry to send a summary to the ECC for supply of gas on short term and long term basis. When this issue came under discussion in the ECC meeting on October 23, 2012, it was apprised that Secretary Water and Power, Nargis Sethi, visited the GTPS a few days ago which was operating at 40-50 percent of its installed capacity. The management of the plant was directed to make all out efforts to enhance the productivity as the country was facing acute shortage of electricity.
According to the Ministry of Water and Power, if additional gas is made available to GTPs, it can operate at 70-80 percent of its capacity. Water and Power Ministry refused to support the summary of Petroleum Ministry saying that the proposed short-term plan for making fertiliser plants operative was not feasible and advised against its approval by the ECC.
Petroleum Ministry, in its summary argued that since April 2012, GTPS is not consuming its full allocation of 200 mmcfd from Kandhkot gas field resulting in curtailed production from the field. Kandhkot can enhance its production to 225 mmcfd which would be sufficient to compensate the proposed withdrawal of 60 mmcfd. Accordingly, full 225 mmcfd gas from Kandhkot field may be supplied to GTPS.
The ECC approved long term plan in principle to supply gas to fertiliser plants and constituted a committee comprising Advisor to Prime Minister on Petroleum and Natural Resources, Minister for Law, Minister for Information and Deputy Chairman Planning Commission to develop modalities for legal arrangements for execution of the long term project etc.
An official of the Ministry told this scribe that the committee has also approved short term gas supply plan of fertiliser sector despite the fact that the ECC did not authorise the committee to take any such decision. Sources in Ministry of Industries maintain that if this short tem plan is approved, the government will not import 0. 3 million tons of urea meant for Rabi season 2012 as was initially recommended by the MoI.