Ogdc: Gas contract inked with fertiliser firms
Fertiliser firms will have to now build the infrastructure for implementation of agreement to receive gas from OGDC.
ISLAMABAD:
The Oil and Gas Development Company signed a direct gas sales agreement with fertiliser producers to supply gas to them from new or unutilised discoveries on a fast-track basis, according to a press release. After two months of the directions of the petroleum adviser to the energy and power companies to negotiate a supply agreement with fertiliser producers, OGDC managed to sign a contract with Dawood Hercules, Agri Tech, Pak Arab Fertilizers and Engro Fertilizers for provision of 130 million cubic feet per day of gas from Kunnar Pashaki Development project. Previously, the gas sale agreement of fertiliser companies were with the distribution companies i.e. Sui Southern Gas Company and Sui Northern Gas Pipelines. The fertiliser firms will have to now build the infrastructure for implementation of the agreement to receive gas from OGDC. Additionally, through this new approach the gas saved from the main SSGC and SNGPL system will be diverted to the starved domestic users.
Published in The Express Tribune, February 16th, 2013.
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some days before when i was under analysis of Engro fertilizers i was astonished to know that in 2012 Fertilizer manufacturers in Pakistan faced over 2.7 million tons urea production loss mainly due to gas curtailment, as they could only produce 4.2 million tons of urea against a total production capacity of over 6.9 million tons per annum. Engro reported loss of 2,934,575 in 2012. Engro Enven plant has the capacity of 1.3 million tons per annum&the revenue forecast is Rs.38408.5m but the revenue generated Rs.30626.52m. this shows the sales revenue variance adverse i.e. Rs.7,781.98. If in line with the sales of previous year sales were 2012 sales were 2.37% lower and finance cost was higher by 140% and expected to be that in 2013. thus the Engro would be able to decrease the cost of sales and would be able for smooth payment of its interests acquired for the Enven plant, last year the Engro hadn't paid any dividend due to this agreement the shareholder would be able to entertain its shareholder in coming year.