India proposes fertiliser plant in Qatar

New Delhi: India may soon set up a 1.6-million-tonne fertiliser plant in joint venture with Qatar under a buyback arrangement for sourcing urea at a fixed price from the Gulf nation.

Fertiliser Secretary Atul Chaturvedi and IFFCO Managing Director U S Awasthi are in Qatar for holding preparatory talks for the proposed plant, which is likely to come up on the lines of the one set up in Oman, official sources said.

Qatar has agreed to supply gas at the rate desired by India for the proposed urea unit, the capacity of which is likely to be 1.6 million tonnes annually. “The government will not shy away from investing in the proposed urea plant if the need be. All needed for the project is availability of gas at an affordable rate, which Qatar has assured,” a senior official in the fertiliser ministry said.

From Qatar, India is keen to source a minimum of 2.5 million tonnes of additional liquefied natural gas (LNG) and buying fertilisers on a long-term contract. During Prime Minister Manmohan Singh’s visit to the Gulf nation early this month, he had discussed the possibilities of Qatar supplying fertilisers to India. It could either be through investments in fertiliser plants in India or expanding production of the units in Qatar with assured buyback.

The official said both India and Qatar are looking at forming a joint venture with 50 per cent equity participation each for setting up the urea plant on the lines of Oman India Fertiliser Company (OMIFCO). In OMIFCO, Oman Oil Company holds 50 per cent equity while 25 per cent each is shared by Indian Farmers Fertiliser Cooperative Ltd (IIFCO) and Krishak Bharati Cooperative Ltd (KRIBHCO).

Other than urea, India is also looking at forming joint ventures with companies in Seria, Jordan, Nigeria, South Africa and Mozambique for securing rock phosphate, which is used for producing SSP (single super phosphates).

As of now, India is a net importer of urea. The total overseas shipments of the fertiliser from abroad was worth $1 billion for a quantity of 6 million tonnes in the last fiscal. According to the government’s projections, the urea imports are likely to touch 10 million tonnes by 2011.