Petroleum Ministry says no gas for new fertiliser plants

ISLAMABAD: The Ministry of Petroleum has flatly refused the allocation of further gas for any new fertiliser plants, saying under present circumstance there was no possibility to allocate any fresh gas quota for any newly installed fertiliser plant in the next five years.
According to official sources this reply was made by the petroleum ministry to an official request forwarded by the Ministry of Industries, which had sought additional gas quota for the development of a new 0.5 million tons urea fertiliser plant in the next five years.
It is important to mention that the construction of a fertiliser plant will take at least five years beginning from the date of approval. The approval is granted only if the petroleum ministry assures provision of feedstock gas, which constitutes essential raw material, to the urea plant after its completion.
The Petroleum Ministry, Pakistan Today was informed, “That given present circumstances, it was very difficult to predict to countenance any new gas allocation to the fertiliser industry, particularly for the establishment of a new plant”.
The National Fertiliser Strategy 2010-2025 (NFS) drafted by the management consultancy, Arthur D Little for the Ministry of Industries and Production in 2009 had recommended the need for establishing at least one 0.5 million tones urea plant every five year to meet country’s rising demands.
Due to the higher consumption of fertilisers in 2008, the import bill for urea and di-ammonium phosphate (DAP) peaked at Rs 82 billion. The NFS estimates population growth of 19 percent from present levels by 2025 with income and food consumption rising to 42 percent. However, the arable land will decline by 25 percent per capita. This requires expansion in fertiliser supply by 70 percent by 2025.
Natural gas is a depleting resource in Pakistan. In the global context, prices are expected to rise constantly in coming years. The domestic fertiliser sector already has a share of 16 percent in the total consumption of natural gas in the country. In a best-case scenario, all fertilisers companies operating at full capacity, in optimal condition, can only cater to the demand of urea till 2017.