Matix Fertilisers Hoping To Resume Production Soon

Matix Fertilisers and Chemicals is reportedly set to start production of its stalled fertiliser plant by April. Promoted by the Kanodias of Datamatics group, the 1.3-million-tonne urea plant near Panagarh in West Bengal – the only one in the East – has been idling for nearly three years for want of gas.

With the government finally allowing pricing and marketing freedom, the two coal-bed methane (CBM) producers in West Bengal are hoping for their single biggest prospective customer to start production. To run at the full capacity, the plant needs 2.4 million standard cubic metres of gas a day (mmscmd) but the prospective supplier Essar Oil and Gas Exploration and Production Ltd. (EOGPL), formerly Essar Oil, reached barely half the promised capacity at one mmscmd. While Essar could not find a customer for its gas, Matix could not start operations as the feedstock availability was way below the minimum threshold.

Matix is now reportedly trying to solve the problem by adding a propane plant that will meet the internal requirement of 0.4-mmscmd equivalent CBM. With the existing availability of approximately 0.85-mmscmd gas from Essar (Essar has already entered supply pact for the rest 0.15-mmscmd with other users) and spare capacities from the other CBM producer, Great Eastern Energy (GEECL), can help Matix to run the fertiliser plant at 55-60 per cent capacity.

Flexibility in pricing

The government has allowed CBM producers to sell gas at arm’s length price to anyone of their choice beginning April. Accordingly, Essar has already selected aggregator GAIL, through auction, to sell its entire production for next 15 years from Ranigunj block (near Durgapur) at a crude-linked net calorific value based price, which works out at $8.08 per million British thermal unit for the current month.As per the agreement, GAIL will use the pipeline infrastructure built by Essar to supply gas to Matix and other consumers.