The Coal India limited (CIl), the gas utility GAIl India and fertiliser majors RCF and FCIl will form two joint ventures (JVs) this month for revival of the Talcher urea plant at a cost of Rs8,200 crore.
The first JV will be for setting up of an upstream coal gasification unit where GAIl will have a majority stake. The second JV part involves setting up of a urea-cum-ammonia nitrate complex where Rashtriya Chemicals Fertilisers (RCF) would have majority stake, sources said. The plant will have a capacity of 1.2 million tonnes per annum. The first JV will be named as ‘GAIl Coal Gas limited’ with GAIl having a major stake and the second JV will be named as ‘Talcher Fertilizer and Chemicals limited’, sources added.
“The first JV will make gas from the coal mined and provided by the Coal India (CIl), while the second JV will manufacture urea using gas supplied from the first JV as feedstock,” a highly placed source said.
This is perhaps the first greenfield plant in the fertiliser sector in almost the last decade or so and it is also the first plant which will use coal gasification technology, sources added. The FCIl had signed a MoU with RCF, GAIl and CIl in September 2013 for revival of this plant, which was closed in 2002. The Board for Industrial and Financial Reconstruction (BIFR) had de-registered FCIl on June 27, 2013, thus paving the way for revival of its closed urea plants. This happened after the Government had approved the proposal to revive five closed units of FCIl at Sindri, Talcher, Ramagundam, Gorakhpur and Korba. The Government had also approved the waiver of loan and interest amounting to Rs10,644 crore to FCIl last year.
Meanwhile, the old equipment, plant and machinery cannot be used in the new unit and is worth only scrap. This scrap is being sold to make way for setting up of a new plant.