Once again: Gas supply discontinued to Engro’s new fertiliser plant

SNGPL took the decision based on cabinet’s orders.

KARACHI: Gas supply to Engro’s new fertiliser plant has been completely shutdown from December 8, 2011 by Sui Northern Gas Pipelines Limited (SNGPL), company officials said on Friday.

It is expected that the other four fertiliser plants in SNGPL network will also face discontinuation of gas in a few days as per the cabinet decision to supply more gas to other industries in upper parts of the country.

After protests by local textile and other industries, the government decided to carry out a three-day per week gas load management plan, instead of the expected four-day shutdown decided earlier.

Engro’s EnVen has been completely shut down for the 11th time this year by SNGPL.

However, the government, on November 17, had committed to the fertiliser sector that continuous gas supply will be provided until December 31, 2011 in order to meet urea demand for the Rabi season.

The fertiliser sector claims that owing to assurances from the government, they had reduced the per bag urea price to Rs1,480 from the previous Rs1,580. Official urea prices had steeped to as high as Rs1,800 per 50 kg bag, and had been gradually brought down on assurances of continuous gas supply till December-end.

The recent curtailment of gas to fertiliser plants will irk farmers who may have to spend more on buying imported urea for the Rabi season due to the expected price hike by hoarders and dealers.

Engro fertiliser management says the government had committed 100 million cubic feet per day (mmcfd) for the Daharki plant, and only after that Engro had set up the world’s largest single train ammonia-urea plant in Daharki, which has a production capacity of 3,850 tons per day (1.3 million tons per annum).

Engro Fertiliser’s new urea plant, which sat idle for 158 days following its construction due to gas curtailment, would have helped to end the country’s urea deficit.

The company further claims that it would have helped minimise the country’s foreign exchange outflow/loss considerably and helped the national exchequer save funds as imported urea is costly
and hurts the domestic industry.

Published in The Express Tribune, December 10^th, 2011.