Shell, GE, ThyssenKrupp in fray to be technology partner for Talcher urea plant revival in India

 

Global firms Shell, General Electric Co. and ThyssenKrupp AG have submitted bids to become the technology partner for the revival of the Rs.9,000 crore Talcher fertiliser unit—an integrated coal gasification-cum-fertiliser plant—in Odisha. 

 

The name of the technology provider will be finalised next week.

 

The National Democratic Alliance government plans to become self-sufficient in fertiliser production and has decided to invest around Rs.40,000 crore to revive the sick urea units in Uttar Pradesh, Bihar, Odisha and Jharkhand. It recently announced the revival plans for three closed fertiliser units at Barauni, Sindri and Gorakhpur through a joint venture of public sector units Indian Oil Corp. Ltd, NTPC Ltd and Coal India Ltd (CIL).

 

State-run Projects Development India Ltd (PDIL) in September had invited bids for selecting a technology partner for the Talcher unit. According to information available on the website of the ministry of chemicals and fertilizers, the Talcher project will produce 1.3 million tonne of urea and few other fertilisers as well.

 

“All together four bids have been received from technology partners. It will be finalised by 20 November and will be communicated to the ministry of chemicals and fertilizers,” said a senior government official on condition of anonymity.

 

InfraCircle could not ascertain the name of the fourth bidder. Another government official, who also did not want to be named, said the government had given a deadline of 20 November for the selection of a technology partner for revival of the Talcher unit and its progress will also be reviewed next week.

 

In December 2014, a consortium of four state-run companies, including GAIL (India) Ltd, CIl, Rashtriya Chemicals and Fertilizers Ltd and Fertilizer Corp. of India Ltd signed an agreement to set up a coal gasification-cum-fertiliser plant at Talcher. However, the plan had hit the skids with project consultant SBI Capital Markets Ltd raising doubts over its feasibility, as reported by InfraCircle on 12 April.    

    

The Talcher unit will be a combination of two key processes—a unit for converting coal into synthetic gas, or syngas, and another unit that will use the gas as fuel to manufacture urea and other fertilisers. Urea production fuelled by the coal gasification technology costs  Rs.2,000-3,000 less per tonne which will benefit farmers.

 

Queries emailed to the spokesperson of the fertiliser ministry, PDIL, Shell, GE and ThyssenKrupp on 16 November remained unanswered.

 

Analysts, however, believe more than selection of technology partner, it will be the economic viability of the project which needs to be considered. “These global firms must be having technology to produce gas from high-ash content coal. However, it needs to be seen that what will be the cost of urea compared with imported gas-based fertiliser,” said K. Ravichandran, senior vice-president and co-head, corporate ratings at Icra Ltd, a rating agency.