ISLAMABAD: Engro Fertilizer Limited has requested the official allocation of 74 MMCFD of gas at a preferential rate to produce the required quantity of urea.
In a letter to Petroleum Secretary Ali Raza Bhutta, CEO of Engro Fertilizers, Nadir SQureshi said that for the formal allocation of 74 MMCFD of gas currently supplied to Engro Fertilizers Limited (EFERT), the base plant of the reservoir Habib Rahi Limestone (HRL) by Mari Petroleum Company Limited (MPCL) as trading volume against undrawn gas volumes of their other customers as permitted by the ECC.
He maintained that over the past few years, EFERT has gradually increased its production from 500,000 tons to 780,000 tons to test the capabilities and vulnerabilities of its base plant which has already exceeded its useful life.
Based on detailed engineering studies, the company has now concluded that with the base plant continuing to operate, a significant Balancing Modernization and Replacement (BMR) investment of over $50 million is essential.
“If these BMR expenses are not incurred, we will not be able to operate the base plant and the country would lose all production from this unit,” he added.
However, with this investment, the base plant would be able to safely and sustainably produce increased volumes of up to 970,000 tonnes, an increase of approximately 200,000 tonnes from operating level. current. On a monthly basis, this corresponds to more than 80,000 tonnes at the start of the fourth quarter of this year.
Under clause 2.5 of Fertilizer Policy 2OO1 (FP 2001), BMR feed gas is entitled to receive the same concessions and exemptions as a new plant for a period of 7 years.
“We request the formal allocation of 74 MMSCFD at a preferential gas price in accordance with the provisions of FP 2001 to enable the company to achieve the required BMR during this year, thus guaranteeing a sustainable supply of 970,000 tonnes of urea from low BTU indigenous gas resources,” Qureshi said adding that the base plant will cease operations without this $50 million BMR.
The company said it needed the support of the Secretary of Petroleum to allocate the gas to BMR under FP 2001 to ensure the sustainability of domestic supplies of urea from the base plant and thus enable the nation’s long-term food security.
Copyright Business Recorder, 2022