Govt to operationalise urea plants, allow them private LNG import

ISLAMABAD: The government is likely to soon operationalise the already closed fertiliser plants by permitting them to import LNG for urea production, as it is anticipating increase in urea demand after the recent approval of multi-billion rupees agriculture support package, a top government official told The News on Thursday.

Since the super-cooled gas price has reduced to around $2/mmbtu due to weak demand and scarce storage, urea manufacturers including Agritech in Mianwali (formerly Pak-American Fertilisers Limited) and FatimaFert, Sheikhupura had requested the government to allow them import of LNG for their plants, an official of the Petroleum Division said.

These plants having combine urea production capacity of around one million tons per annum are closed for the last five months, the reason being shortage of local gas.

Nadeem Babar, Special Assistant to Prime Minister for Petroleum, when contacted, confirmed it through a text message, saying, “Yes, we are working on giving them gas and providing a framework for them to import themselves. Details are under discussion.”

A letter written to Nadeem Babar, which is available with The News, these companies have informed the government saying, “We have already signed cooperation agreement with ExxonMobil to work together with the aim to enable a regulatory framework which would allow fertiliser plants to import LNG from ExxonMobil for onward delivery of RLNG to their plants site.”

After this approval, plants would be allowed to import LNG at spot rates independent of the Qatar LNG.

Sajid Mehmood Qazi, Joint Secretary and spokesman for the Ministry of Energy, Petroleum Division, in a written reply to questions on this matter said, “Yes, they have recently expressed their interest for hiring of re-gasification services out of idle capacity of Terminal-2 for import of LNG for use. Pakistan LNG Limited (PLL) and Pakistan LNG Terminal Limited (PLTL) are in the process of devising a mechanism for offering their re-gasification services to the private sector (including these plants).”

He said that government wants to encourage the private sector to participate in the LNG sector.

Qazi further said, “The matter of operationalising the two plants on SNGPL system (Fatima Fert and Agritech) is under deliberation among stakeholders. The Ministry of Industries and Production will give final approval for opening them.”

Nadeem Nazir, MD and CEO of PLTL, said they have held meetings and are working on it.

Last month, a meeting was held among Governor Punjab Chaudhry Muhammad Sarwar, SAPM Nadeem Babar and Minister for Industries and Production Muhammad Hammad Azhar and they discussed operationalisation of these closed plants that are located in Punjab. In pursuance to the earlier meeting, on Monday (May11), a joint meeting was convened on this issue among Petroleum Division, Ministry of Industries, National Food Security and Research, PLL, ExxonMobil and representative of these fertiliser companies to finalise modalities involved, the official of the Petroleum Division said.