Engro’s Enven, located in Deharki, Sindh, is the world’s largest single-train, ammonia-urea plant with a production capacity of 1.3 million tons per annum. PHOTO: FILE
The Economic Coordination Committee (ECC) has rejected the plan to provide gas to Engro Corporation’s new fertiliser plant at concessionary rates.
The Ministry of Industries moved a summary that proposed diverting gas from Engro’s old plant on the Mari gas field to its Enven plant at concessionary rate of 70 US cents per million British thermal unit (mmbtu).
Engro’s Enven, located in Deharki, Sindh, is the world’s largest single-train, ammonia-urea plant with a production capacity of 1.3 million tons per annum.
Sources told The Express Tribune that the economic decision-making body, in its last meeting, approved the permanent diversion of gas to Enven from its old plant which is on the Mari Gas Company network. The ECC approved Engro’s existing Mari gas allocation for reallocation to Sui Northern Gas Supply (SNGPL) for onward supply to Engro’s new energy efficient billion-dollar-plant on a dedicated basis, supplied under the existing SNGPL contract with all terms and conditions staying unchanged.
According to the contract, the Enven plant was allocated 100 million cubic feet per day (mmcfd) of gas from the Qadirpur field on the SNGPL network at 70 US cents per mmbtu under the Fertilizer Policy 2001. But the plant has remained closed since April 2012 due to gas shortages.
Engro worked out a plan to divert gas from its old plant to Enven.
The foods and fertiliser giant had been getting 103mccfd from the Mari field at a rate of $3.3 per mmbtu, however, it wanted SNGPL to implement the concessionary rates in line with the contract with the utility company to secure gas supply from the Qadirpur gas field.
Sources went on to say that earlier the petroleum ministry had rejected the proposal of gas diversion as concessionary rates. However, the ministry moved a summary to the ECC to divert gas from the Mari field to Enven for a year till the completion of a plan regarding the dedicated gas supply from various fields to the fertiliser plants on the SNGPL network under a long-term arrangement.
Engro did not agree with the aforementioned plan and approached the Ministry of Industries to win a nod from the ECC for permanent diversion of gas from Mari field to SNGPL fixed at 70 US cents per mmbtu.
“The ECC approved permanent diversion of gas but rejected the plan to provide gas at concessionary rates,” sources said.
In light of the developing situation, Engro’s old fertiliser plant will join the four fertiliser plants on the SNGPL network under ECC’s long term solution of supplying 202mmcfd on a dedicated basis from various gas fields.
Engro Fertilizers along with other fertiliser plants singed a gas sales agreement (GSA) from the Kunnar Pasakhi Deep and Reti Maru fields and is expected to sign GSAs for the other fields soon.
Published in The Express Tribune, March 15th, 2013.
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