How competitive gas sourcing through Exchanges can boost India's fertiliser industry
AgroSpectrum|AgroSpectrum India July 2023
Gas Exchanges provide an alternate avenue for buyers from the fertiliser sector and sellers to meet their natural gas demand and facilitate transparent price discovery. This inherent quality of Gas Exchanges has led to consistently lower price discovery as gas accounts for 70-80 per cent of the cost of fertiliser production.
How competitive gas sourcing through Exchanges can boost India's fertiliser industry

RAJESH KUMAR MEDIRATTA,

MD and CEO, IGX (Indian Gas Exchange)

Out of India’s annual natural gas consumption of ~156 MMSCMD (Million Metric Standard Cubic Meters per Day), nearly 52 MMSCMD is consumed by its fertiliser (urea) industry. Limited domestic gas production from nominated fields, coupled with the restrained allocation of domestic gas to the sector, has led the fertiliser industry to meet almost 80 per cent of its gas requirement through imported LNG (Liquefied Natural Gas). As per the allocation policy, fertiliser consumers are accorded priority after City Gas Distribution entities. Hence, incremental consumption of gas by the fertiliser sector is satiated from Re-gasified Natural Gas (R-LNG).

However, just about 60-70 per cent of such R-LNG procurement by the fertiliser industry is through long-term/mid-term purchase agreements, and the remainder volumes are sourced through Empowered Pool Management Committed (EPMC) on a spot basis. Domestic gas is pooled with R-LNG to provide natural gas at a uniform delivered price to all the fertiliser plants connected to the Gas Grid.

Bearing the brunt of rising international gas prices

The increasing use of imported gas by the fertiliser sector while the international gas prices are at a record-high, is a cause for worry. Gas accounts for 70-80 per cent of the cost of production, depending on feedstock prices and the energy efficiency of the fertiliser plant. Alternate avenues for procurement, such as a technology-enabled marketplace providing flexibility, efficiency and competitive price discovery, may help in lowering the expenditure of the fertiliser industry.

هذه القصة مأخوذة من طبعة AgroSpectrum India July 2023 من AgroSpectrum.

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هذه القصة مأخوذة من طبعة AgroSpectrum India July 2023 من AgroSpectrum.

ابدأ النسخة التجريبية المجانية من Magzter GOLD لمدة 7 أيام للوصول إلى آلاف القصص المتميزة المنسقة وأكثر من 9,000 مجلة وصحيفة.

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