energy norms for urea units gokak 2003
DESCRIPTION
Fertilizer manufacture needs energy efficient processes.TRANSCRIPT
REPORT
OF
THE COMMITTEE
ON
EFFICIENT
ENERGY LEVELS ETC.
FOR
UREA UNITS
MAY, 2003
Index
S.No. Topic Page Nos.
I. Introduction 1 - 2
II. Recommendations of ERC 2 - 3
III. Constitution of the Committee 3 - 4
IV. Deliberations of the Committee 4 – 12
V. Pre-set energy levels for Stage – I 12-13
VI. Pre-set energy levels for Stage – II 13 – 17
VII. Raw material mix of inputs 17 -19
VIII. International energy levels 19 – 21
IX. Mechanism for computation of escalation/de-escalation
21 - 25
X. Switchover of non-gas based units to Gas/LNG in Stage – III.
25 -28
XI. Energy level benchmarking (beyond Stage – II)
28 – 31
XII. Recommendations 31 – 37
XIII. Chairman‟s comments on certain
issues raised by two members
38-48
Annexures
I. Annexure-I Executive Summary of ERC recommendations
49-56
II. Annexure-II-A DOF‟s OM dated 25.6.2002
57-59
III. Annexure-II-B DOF‟s OMs dated 28.8.2002, 23.3.2003 and 1.4.2003.
60-66
IV. Annexure-II-C 67-71
DOF‟s OM dated 30.1.2003
V. Annexure-III List of 32 urea units under different groups
72
VI. Annexure-IV to IX Data regarding energy levels and raw material mix of inputs for urea units in different groups
73-113
VII. Annexure-X International energy levels.
114-120
FOREWORD
I have great pleasure in writing the foreword to the Report of the
Committee which was appointed by the Department of Fertilizers to suggest
energy norms for urea units and other related matters, keeping in mind the need
to do away with individual unit based Retention Pricing Scheme and introduce a
Group Concession Scheme.
The Committee met on eleven occasions in Delhi and had the benefit of
interaction with the representatives of the industry. The data was collected from
the industry on the pattern of F.I.C.C.
The Committee has made its recommendations after taking into account
the developments that have taken place since the submission of the report by the
Expenditure Reforms Commission. The Committee noted during the
deliberations that the heterogeneity of the industry is a major constraint in
evolving any model based on uniform norms. There are significant differences
even within the same group or category. The Committee, however, has made an
earnest effort to bring about as much uniformity as possible, despite this
handicap.
The Committee has also noted that the enactment of the Energy
Conservation Act, 2001 has introduced a qualitative change in the situation. The
declaration of the fertilizer industry as an energy intensive industry under the Act
and the constitution of the Bureau of Energy Efficiency are significant
developments. Now that the Act has came into force, the major decisions in
regard to the subject matter of the Committee can be taken only by the newly
created/designated agencies, which are sure to initiate such action as they deem
fit under the Act.
I would be failing in my duty if I do not place on record, my deep
appreciation of the participation in the deliberations of the Committee, of Ms. S.K.
Sekhon Executive Director, FICC, Shri Sudhir Krishna Joint Secretary
(Fertilizers) and Shri S. Chandra, Joint Adviser, Department of Fertilizers.
Indeed the richness of their experience has contributed greatly in formulating its
recommendations. The Committee is also grateful to the Chairman, Vice-
Chairman and the Director General, Fertilizers Association of India and the Chief
Executives of HFC, NFL, MFL, SFCL, RCF and FACT for making presentations
before the Committee and Shri S. Nigam, Economic Adviser, Ministry of
Commerce and Industry for attending a meeting of the Committee as a special
invitee.
I am also deeply grateful to all the members of the Committee but for
whose meaningful participation in the deliberations, it would not have been
possible to finalize the Report. I also appreciate the assistance I got from Shri
Manoj Kumar, Director in the Department of Fertilizers, who is also Member
Secretary of the Committee. I also thank Shri S.P.S. Tomar, SO Department of
Fertilizers for providing backup support and efficient secretarial assistance.
Finally, the Committee would like to thank FACT, RCF and IFFCO for making
available their premises at New Delhi for holding most of the meetings of the
Committee.
( A.V. Gokak )
Chairman
I. INTRODUCTION
The objective of providing fertilizers to farmers at affordable prices, while
simultaneously ensuring an adequate return on investment to the entrepreneurs
has been the aim of the fertilizer pricing policy of the Government. The
introduction of the Retention Price Scheme (RPS) w.e.f. 1st November, 1977 has
been one of the early initiatives in this direction. Under the Scheme, the
difference between the statutorily notified sale price and the retention price (cost
of production as assessed by the Government plus a reasonable return on net-
worth) is paid as subsidy. The retention prices are determined unit-wise based
on a combination of norms and actuals pertaining to the project cost, capacity
utilization, cost of raw materials and such other factors. Presently, the RPS is
operating in respect of urea manufacturing units only. Though, the RPS has,
over the years achieved, to a remarkable degree, its professed objectives of
increasing investment in the fertilizer industry and thereby creating new
capacities and enhanced production along with increasing use of chemical
fertilizers especially, nitrogenous fertilizers, some of the deficiencies of the
Scheme have also become too obvious; nor is the Scheme any longer in tune
with the current trend of deregulation and decontrol.
There have been many attempts in the past to remove the deficiencies of
the RPS. Some of the most prominent ones are incorporated in the
recommendations of the High Powered Committee (HPC) of Secretaries on RPS
in 1986, HPC on Fertilizer Consumer Prices, 1987, Joint Parliamentary
Committee in 1991, study of the Bureau of Industrial Costs and Prices (BICP),
1992 and the High Powered Review Committee in 1998. The last major attempt
to suggest a viable alternative to the RPS for urea units was made in September,
2000, in the report of the Expenditure Reforms Commission (ERC), headed by
the former Finance Secretary, Shri K.P. Geethakrishnan.
The recommendations of the ERC were all encompassing in nature and
covered almost all the vital issues pertaining to the urea industry. The ERC
report, inter alia, delineated the contours of a new urea pricing policy in detail and
even gave a vision of the goal to be reached in a none too distant future, i.e.
eventually bringing fertilizer prices charged to farmers to the level of import parity
price; protecting the real incomes of the small farmers, maintaining food security
and promoting a balanced use of N, P & K. The executive summary of the
recommendations of the ERC on „Rationalising Fertilizer Subsidies‟ is given in
Annexure-I to this Report.
II. THE ERC RECOMMENDATIONS
In brief, the ERC report envisages dismantling of the control system in a
phased manner, leading at the commencement of the fourth phase, to a
decontrolled fertilizer industry which can compete with imports albeit, with a small
level of protection and a feedstock cost differential compensation to
naphtha/LNG based units to ensure self-sufficiency.
The ERC postulated four phases in the proposed new pricing policy for
urea units, beginning with the discontinuance of the RPS w.e.f. February 1, 2001,
along with the introduction of the group based concession scheme. The scheme
of ERC was as follows:
(i) First Phase
(a) In this phase, beginning February 1, 2001, the existing units are to be
grouped into five categories – pre-1992 gas based units; post-92 gas
based units; naphtha based units, FO/LSHS based units and mixed
feedstock based units.
(b) Individual retention price scheme will be scrapped and in its place a
urea concession scheme with a fixed amount of concession for each of
these groups will be introduced.
(c) The distribution control mechanism will be done away with, though the
maximum retail price arrangement will be continued.
(d) The sale price of urea in real terms to be increased by 7 per cent every
year w.e.f. 1.4.2001.
(ii) Second Phase
In the second phase, beginning April1, 2002, the concession rates are
reduced to reflect the possibility of reasonable improvement in feedstock usage
efficiencies and reduction in capital related charges (CRC).
(iii) Third Phase
The third phase will begin on April 1, 2005 and reflects the feasibility of all
non gas based plants to modernize and switch over to LNG. For plants which do
not switch over to LNG as feedstock, only the level of concession that the unit
would have been entitled to if it had switched over to LNG, would be allowed.
(iv) Fourth Phase
The fourth phase begins on 1.4.2006, when the industry is decontrolled.
The farm gate prices will reach Rs. 6903 by 1.4.2006, a level at which the
industry can be freed from all controls and be required to compete with imports,
with variable levy ensuring availability of such imports at the farm-gate at Rs.
7,000 per tonne of urea. While no concessions will be necessary from this date
onwards for gas based, FO/LSHS and mixed feedstock plants, existing naphtha
plants converting to LNG as also new plants and substantial additions to existing
plants will be entitled to a feedstock differential with that for LNG plants serving
as a ceiling.
III. CONSTITUTION OF THE COMMITTEE
The ERC, in addition to recommending a group concession scheme for
urea manufacturing units, had also envisaged improvement in the energy
efficiency in Phase-II. The report had also indicated certain energy consumption
norms for the non gas based units. While examining the proposals of ERC, the
Department of Fertilizers (DOF) decided to work out pre-set energy consumption
norms for each group, including the gas based units. This Committee was
accordingly constituted to give its recommendations on the following issues
concerning the urea industry, keeping in view, the recommendations of the ERC:
i) Efficient energy levels for the urea manufacturing units,
keeping in view the existing norms and the norms which the
modern plants are expected to achieve. This exercise was to
be undertaken also by examining the desirability of
feedstock/technology based efficient energy levels and
possible milestones in terms of achieving international
standards.
ii) Mechanism for determining the escalation and de-escalation
in the feedstock cost for various units/groups.
iii) Mechanism for feedstock differential cost in respect of various
non-gas based units after Stage-II keeping in view the likely
scenario about availability, pricing and infrastructure required
for the LNG.
iv) Mechanism for treatment of substitution of feedstock due to
non-availability of gas/LNG etc.
A copy each of the Department of Fertilizers‟ Office Memoranda dated
25th June 2002 and 28th August, 2002, 24th March, 2003 and 1st April 2003 issued
in this regard is placed at Annexure-II-A and II-B respectively.
IV. DELIBERATIONS OF THE COMMITTEE
In deliberating on the issues covered by the terms of reference of the
Committee, a composite approach was followed, comprising, inter-alia, the
following:-
Collection of actual operating data for last five years, (1997-98 to 2001-02)
from all the thirty-two urea-manufacturing units and its classification in
analyzable components.
Examination of the report of the ERC titled „Rationalizing Fertilizer
Subsidy‟ to serve as the backdrop for formulation of its recommendations.
Interaction with representatives of fertilizer industry and the Fertilizer
Association of India (FAI), the apex body of the fertilizer industry.
Analysis of background notes, suggestions and notes/memoranda
submitted by the members of the Committee and by the representatives of
the industry.
In all, the Committee met in New Delhi eleven times between July, 2002
and March, 2003 before finalizing its recommendations.
The Committee has also taken cognizance of the following developments
that have taken place after the ERC submitted its report:
(i) ERC had assumed that the fertilizer industry would be able to obtain
naphtha and Fuel Oil/LSHS at import parity prices. However, the
fertilizer industry could not meet the expectation largely on account of
the non-availability of the required infrastructure for handling import of
naphtha and FO/LSHS. The necessary infrastructure was available
only with the oil companies and they were generally unwilling to permit
the fertilizer industry to make use of the same. The significant saving
that the ERC had expected on account of import of naphtha and
FO/LSHS at import parity prices has, therefore, not accrued.
(ii) The ERC had estimated that LNG would be adequately available in the
country to facilitate conversion of non-gas based plants to LNG by the
year 2004. This assumption has not materialized. The recent discovery
of gas in deep waters of Krishna Godavari offshore and in Rajasthan
is still to be further appraised to determine firm reserves in the area
from the point of view of commercial production. As of now, it is
difficult to get a firm idea about either the quantum or timing of
availability of gas in different locations to facilitate conversion of non-
gas based fertilizer plants to gas for feedstock.
(iii) The Government‟s decision on the new pricing policy for urea units to
replace the RPS is now available and the Government of India,
Department of Fertilizers have vide their OM dated 30.1.2003
announced the new pricing policy for urea units which would be
implemented from 1.4.2003. A copy of DoF‟s O.M. dated 30.1.2003 is
appended as Annexure-IIC. The Committee noted that the new pricing
policy for urea units is group based in sharp contrast to unit-specific
Retention Price Scheme.
a) Stages considered in the Report
The Committee has considered the same stages for its
recommendations as considered by the Government for its new Group
Concession Scheme for urea units, namely:
I. Stage-I – 1.4.2003 to 31.3.2004
II. Stage-II – 1.4.2004 to 31.3.2006
III. Stage-III – 1.4.2006 onwards.
b) Grouping of plants
i) Gas based plants:
Gas based plants have been divided into two groups, namely, i) Pre-92
Gas based plants and ii) Post-92 Gas based plants, in line with the
recommendations of ERC.
ii) Naphtha based plants:
Naphtha based plants have been divided into two groups namely i) Pre-92
Naphtha based plants and ii) Post-92 Naphtha based plants. The naphtha
based plants which were set up after 1992, have a larger size and are more
energy efficient, but also entailed higher capital costs. On the other hand,
the older plants i.e. pre-1992, had lower capital costs but are less energy
efficient. These will have to make very intensive efforts in order to improve
efficiency in the use of energy and cannot be expected to be as energy
efficient as the post-1992 plants unless they undertake substantial capital
investments. Therefore, it was considered prudent to divide the naphtha
based plants into two different groups i.e. pre-1992 and post-1992 naphtha
based plants.
iii) FO/LSHS based plants:
FO/LSHS based plants have been kept in a single group in line with
the recommendations of ERC.
iv) Mixed Energy based plants:
In line with the recommendations of the ERC, the Committee has
considered such of the gas-based units to be in the mixed energy based
group, whose consumption of naphtha/FO/LSHS is more than 25% of the
total energy consumption. NFCL-II was included by ERC in this group as its
consumption of raw material was assumed in the ratio of 30:70 for gas and
naphtha, respectively. Simultaneously, ERC had observed that this ratio was
likely to change in future in view of additional allocation of gas. The ERC had
accordingly, recommended that the actual mix needs to be reviewed for this unit
periodically at the time of grant of concession.
The Committee has scrutinized the data pertaining to the NFCL-II unit and
has found that this unit has been using less than 25% of non-gas energy in the
last year taken up for analysis, i.e. 2001-02. Hence, NFCL-II has been included
in the post-92 gas based group and not in the mixed energy based group.
Based on the above definitions regarding grouping, all the plants have
been divided into six groups as given below:
Groups Description No. of plants
Group-I Pre-92 Gas based plants 6
Group-II Post-92 Gas based plants 7
Group-III A Pre-92 Naphtha based plants 8
Group-III B Post-92 Naphtha based plants 2
Group-IV FO/LSHS based plants 6
Group-V Mixed Energy based plants 3
Total no. of plants 32
The list of all the thirty-two urea plants is given in Annexure-III. Given the
uncertainty about the availability of gas, at least in the near future, the extent of
alternative fuel/feedstock is also likely to keep on changing. The Committee
recommends that in case consumption of alternative feedstock/fuel in a
gas based unit exceeds 25%, the classification of the unit should be shifted
from gas based to the mixed energy group until the mix again changes
warranting its inclusion in the gas based group. Likewise, the classification
of a unit in the mixed energy group may also undergo similar change. The
Committee recommends that this exercise should be undertaken on an
annual basis.
c) Collection of actual operating data:
The data about energy consumption figures was collected for the last five
years i.e. from 1997-98 to 2001-02 from all the thirty-two urea manufacturing
units. Units were asked to furnish the break-up of energy consumption data in
terms of various energy inputs used for the manufacture of urea. In order to
maintain uniformity and comparability in the collection of data, proformae were
devised and the units were requested to provide the data in the prescribed
proformae on FICC pattern and as furnished to FICC earlier. The data collected
from the units and their group-wise analysis is enclosed as Annexure-IV to
Annexure-IX. The Committee has based its observations and recommendations
on the data so collected. The Committee noted that the basic figures as also the
conversion calculations into Gcal of energy as given by each urea unit are liable
to be scrutinized by the Government at its own level.
d) Outlier Plants:
During group-wise analysis of the five years‟ energy consumption data, it
was observed that some plants were having too high or too low specific energy
consumption than the average of the group. These variations arise, on the one
hand, due to technological obsolescence, besides operational inefficiencies
leading to high consumption of energy and, on the other hand, due to economies
of scale and adoption of improved technology leading to lower energy
consumption. The Committee felt that inclusion of such plants in calculating the
average energy of the group would give abnormally high or low values for the
group. In order to remove this aberration, the Committee decided that the plants
having more than 20% deviation in weighted average specific energy
consumption as compared to the weighted average specific energy consumption
of the group for the five years under consideration (i.e. 1997-98 to 2001-02), shall
not be considered for arriving at the group weighted average energy
consumption and such plants shall be termed as Outlier Plants in the group. It
was further decided that such Outlier Plants shall be dealt with separately. In
order to identify such plants, all plants in a particular group, including outlier
plants, were considered for calculating the weighted average specific energy
consumption. Thereafter, the plants whose own weighted average specific
energy consumption was having a deviation of more than 20% from the group
weighted average, i.e., outlier plants were excluded while re-computing the
weighted group average.
Based on above, the group-wise list of Outlier Plants is given below:
Group Outlier plants Group
specific energy consumption
(5 years’ weighted average)
(Gcal/MT Urea)
Percentage deviation from 5 years’ weighted group average
Name of the plant
Energy consumption (5 years’ weighted avg.) (GCal/MT Urea)
Group-I i)HFC,
Namrup-III*
ii)RCF, Trombay-V
17.291
10.433
6.665 159.43
56.53
Group-II - - 5.857 -
Group-III A FACT 11.320 8.116 39.48
Group-III B - - 6.263 -
Group-IV i)FCI, Sindri
ii)NLC, Neyveli
iii)GNFC, Bharuch
17.459
16.259
8.170
10.426 67.46
55.95
(-) 21.64
Group-V - 7.129 -
* The Namrup units of the erstwhile HFC now constitute a separate
company namely, the Brahmaputra Valley Fertilizer Corporation Limited.
e) Analysis of data:
The Committee worked out the following six alternative scenarios for all
the six groups (Please refer Annexure-IV to Annexure-IX for details): -
Case-I Weighted average specific energy consumption of all the
plants of the groups considering last five years‟ operating data
(1997-98 to 2001-02).
Case-II Weighted average specific energy consumption of all the
plants of the groups (excluding outlier plants) considering last
five years‟ operating data.
Case-III Weighted average specific energy consumption of all the
plants of the groups considering last 3 years‟ operating data
(1999-2000 to 2001-02).
Case-IV Weighted average specific energy consumption of all the
plants of the groups (excluding outlier plants) considering last
3 years‟ operating data.
Case-V Weighted average specific energy consumption of all the
plants of the groups considering only last year‟s operating
data (2001-02).
Case-VI Weighted average specific energy consumption of all the
plants of the groups (excluding outlier plants) considering only
last year‟s operating data.
Group-wise weighted average specific energy consumption (Gcal/MT
urea) for all the six alternative scenarios is given below (please refer Annexure-
IV to Annexure-IX for details):
Groups Case-I Case-II Case-III Case-IV Case-V Case-VI
5 years’ average
(1997-98 to
2001-02)
5 years’ average excluding outliers
3 years’ average
(1999-2000 to
2001-02)
3 years’ average excluding outliers
Last year’s average (2001-02)
Last year’s average excluding outliers
Group-I 6.665 6.110 6.566 6.066 6.267 5.970
Group-II 5.857 5.857 5.796 5.796 5.734 5.734
Group-IIIA 8.116 7.915 7.964 7.773 7.787 7.732
Group-IIIB 6.263 6.263 6.206 6.206 5.902 5.902
Group-IV 10.426 10.190 10.163* 10.067* 9.546 9.982
Group-V 7.129 7.129 7.103 7.103 7.032 7.032
* For NFL Bhatinda, the lowest specific energy consumption of 10.210 Gcal/MT
urea and urea production of 567367 MT, achieved during the year 1997-98
have been considered for each of the three years for calculation of three years‟
group average for group-IV. This is because in the remaining years, the
consumption of energy in this plant was significantly higher, and the inclusion of
these figures would have unduly inflated the group weighted average.
V. PRE-SET ENERGY LEVELS FOR STAGE-I:
The recommendations for pre-set energy levels for Stage-I (1.4.2003 to
31.3.2004) are not one of the specific terms of reference of the Committee. The
ERC has also not given any normative pre-set energy level for this stage but has
only considered the actual energy consumption levels of each group for Stage-I.
The Committee, therefore, does not wish to recommend any efficiency norms for
various groups for this stage. Moreover, this stage begins from April 1, 2003 and
urea units do not have any time to adjust to any new norms. It is recommended
that the FICC may calculate escalation/de-escalation in the variable cost for
all the urea units for Stage-I on the pattern of the current practice under
RPS.
VI. PRESET ENERGY LEVELS FOR STAGE-II:
In analyzing the last five years‟ actual operating data of the urea plants of
different groups, the Committee observed that in line with the trend over the last
three years, most of the plants achieved the lowest energy consumption figures
in the last year considered, i.e. 2001-02. However, for recommending the preset
efficient energy levels for Stage-II for the urea units in different groups (including
units considered outliers), the Committee has not considered the performance of
that one year only, i.e. 2001-02. This is because analysis of the data reveals
wide fluctuations from year to year. It may be emphasized that a single year‟s
data may not be true representative of a performance that can be sustained over
a long period as the same is influenced by internal as well as external factors:
internal factors like on-stream days achieved depending upon, among others,
whether annual turn around was taken or not and external factors like availability
of feedstock, particularly gas. Unlike plants located in other parts of the world,
gas based plants in India do not have 100% assured supply of gas and this has
in fact forced some of the units to install dual feed facility so that they may be
able to make up for this shortfall of gas by naphtha, whenever it is necessary.
The level of production and consequently, efficiency of operation also depends
on demand influenced by seasonal condition etc.
It is against this background that the norms for Stage-II have been
worked out on the basis of three years‟ weighted average, (1999-2000 to 2001-
02), excluding outliers.
Based on the above, the recommended preset energy levels for Stage-
II along with those recommended by the ERC are given below:-
Group Energy levels for Stage-II (Gcal/MT Urea)
Recommended by ERC
Based on Actual data (3 years’ weighted average energy consumption including outliers)
Based on Actual data (3 years’ weighted average energy consumption excluding outliers)
Recommended by the Committee
Group-I 6.62 6.566 6.066 6.07
Group-II 5.93 5.796 5.796 5.80
Group-IIIA 7.0 7.964 7.773 7.77
Group-IIIB 7.0 6.206 6.206 6.21
Group-IV 9.75 10.163 10.067 10.07
Group-V 7.0 7.103 7.103 7.10
It has to be emphasized that the outliers on the higher side face a number
of problems - technical, managerial and financial - which affect their techno-
economic viability in the short run as well as in the long run. The percentage of
deviation from the weighted average of the concerned group is nothing but a
symptom of deeper malaise that plagues them. Only one year is not enough for
such units to equip themselves to tackle this problem. The Committee is,
therefore, of the view that these plants deserve a separate treatment for the first
year of Stage-II (i.e., 1.4.2004 to 31.3.2005) in order to prepare them to attain the
efficiency driven group energy consumption norms. The Committee, therefore,
recommends that the specific energy consumption norms for these outlier
plants on the higher side, for the first year of Stage-II should be the same
as considered by the FICC in respect of these units for the 8th pricing
period and thereafter respective group energy norms should be made
applicable in respect of these outlier units also. This, in addition to giving the
outlier plants reasonable time to rectify their deficiencies, would also enable them
to take a commercial decision about continued operations. However, the
specific energy consumption norm for both the years of Stage-II for GNFC,
Bharuch, which is an outlier on the lower side in the FO/LSHS group,
should be the same as considered by the FICC for the 8th pricing period in
order to avoid any undue gain to it in adopting the principle of group
energy consumption norm for the outlier plants in the second year of
Stage-II.
In view of the recommendations for the pre-set energy norms for Stage-II
as given above, the Committee recommends that the concession rates for
the urea units for Stage-II may be reworked by the FICC taking into account
the recommended pre-set energy norms for Stage-II. The Committee
recommends that in order to reward efficiency in energy consumption as
also to offer incentive to all urea units to attain the pre-set levels of energy
consumption in each group during Stage-II, the pre-set group energy
consumption norms may be taken for all the urea units in the group,
excluding the outliers (which have been dealt in the preceding paragraph)
irrespective of their individual energy consumption level, for working out
base concession for Stage-II as well as for escalation/de-escalation.
Note 1: The energy levels in all the groups have been recommended as the
weighted group average of the last three years‟ actual energy
consumption excluding the outliers but limited to two decimal places.
Note 2: The last three years‟ weighted average energy consumption level
for groups II, IIIB and V does not show any variation both with or without
outliers as there are no outliers in these groups.
Note 3: While the energy consumption levels recommended by the ERC for
Stage-II have guided the Committee in its deliberations, the Committee
has not been able to follow the ERC recommendations in their entirety.
This is mainly due to the ready availability of the actual operating data of
all the urea units for the last three years‟ (1999-2000 to 2001-02)
pertaining to their specific energy consumption. It is also due to the
differences in the composition of the different groups as proposed by ERC
and as considered by the Committee.
It can be seen that for the groups I, II and IIIB, the recommended
preset energy consumption levels are lower than those recommended by
the ERC. However, in the case of groups IIIA, IV and V, the
recommended pre-set energy consumption levels are higher than ERC
recommendations.
Note 4: The naphtha based group of the ERC report has been split into two
groups, namely, group IIIA and IIIB and the weighted average of the
specific energy consumption has been calculated separately for both the
groups. Group IIIA, which consists of pre-92 naphtha based plants, shows
higher weighted average group energy consumption level than ERC
recommendation whereas group IIIB comprising post-92 naphtha based
plants shows lower weighted average group energy consumption level
than ERC recommendation. However, the combined weighted average
energy consumption of groups IIIA and IIIB is comparable to the
recommendations of the ERC for this group as a whole.
Note 5 : In group IV (FO/LSHS), the weighted average group energy
consumption works out to be higher than that recommended by the ERC.
This is due to the fact that GNFC, Bharuch, included in this group, has
been considered an outlier on the lower side by the Committee in
determining the weighted average energy consumption level in this group
as per the actual operating data for the last three years. This is due to the
fact that GNFC plant differs significantly from NFL units at Bhatinda,
Panipat, Nangal Expansion and FCI‟s Sindri Modernization, both in
respect of size and technology. GNFC plant capacity is 1350 MT ammonia
per day while the capacity of other plants is 900 MT ammonia per day.
GNFC has adopted Texaco Process technology with two gasifiers while
other plants have adopted Shell Gasification Process with three gasifiers.
Note 6: The weighted average group energy consumption level of group V
(mixed energy) works out to be higher than ERC‟s recommendation for
this group as NFCL-II which was included in group V by the ERC and
whose weighted average specific energy consumption is lower than the
weighted average of the group, i.e. group V, has been placed in group II,
i.e., post-92 gas based.
VII. RAW MATERIAL MIX OF INPUTS:
In view of the Government‟s decision to adopt a group based urea pricing
policy to replace the RPS, the Committee considered the possibility of
recommending group wise weighted average specific energy consumption norm
per tonne of urea based on percentage mix of inputs for the last three years‟ (i.e.
1999-2000 to 2001-02) for each group, excluding outliers. This is on the same
basis as adopted for recommending total energy consumption.
In line with the above, the Committee considered last three years‟ (1999-
2000 to 2001-02) weighted average energy consumption figures (excluding
outliers) for computing the raw material mix of inputs in each group as given
below:
Group % Raw material mix (Based on energy)
Gas (NG, AG)
Naphtha (Naphtha, NGL)
Fuel Oil (FO, LSHS, HSD)
Coal Purchased power
Group-I
3 years‟ average 89.39 9.38 1.18 0.00 0.05
Group-II
3 years‟ average 89.72 10.23 (-) 0.02 0.00 0.07
Group-IIIA
3 years‟ average 0.00 62.91 18.03 12.40 6.66
Group-IIIB
3 years‟ average 0.74 88.09 6.42 4.39 0.36
Group-IV
3 years‟ average 0.00 0.75 55.42 39.78 4.03
Group-V
3 years‟ average
60.63 30.03 6.03 0.00 3.30
The Committee initially considered the desirability of recommending
normative energy mix for various groups, but later dropped the idea after
envisaging the following distortions:
(i) For Gas based units under groups I and II, some of the units could
be compelled to use naphtha for their feed/fuel requirements due to
short supply of gas which may continue for considerable period of
time. As naphtha costs four times compared to natural gas per
million Kcal, the liquidity and the cost structure of the units would be
affected adversely if significant fluctuations/changes occur in the
supplies of gas.
(ii) For mixed energy based units under group V, the mix of feed/fuel
used by each unit varies widely with respect to other units in the
group. Therefore, pre-set mix, if applied, for these plants shall lead
to undue losses and gains.
(iii) As far as group IIIA is concerned, the Committee noted that some
of the units particularly SFC-Kota, IFFCO-Phulpur-I and DIL-
Kanpur, use significant quantities of coal as fuel for generation of
power and steam. Though coal is a less efficient fuel as compared
to naphtha/FO, the average total cost of energy per MT of urea is
far less in case of these units as compared to other units in this
group using naphtha/FO for generation of power and steam. The
Committee noted that such units would benefit considerably by
adoption of notional fuel mix of the group which would entail
significant weightage for naphtha/FO, which is costlier than coal in
terms of equivalent energy. However, if their actual energy mix is
taken into account, these units will suffer significant financial loss
as, on one hand, their overall consumption would be reduced to the
group norm, they also would not get any weightage for use of
cheaper energy source like coal (which, in turn increases the
energy consumption per tonne of urea). The Committee also noted
that the remaining units in group IIIA, which do not use coal at all,
would also suffer undue loss on the basis of preset energy mix as
to that extent their usage of naphtha/FO would be artificially
suppressed.
The Committee, therefore recommends as follows:
i) In case of three plants in group-IIIA, namely, SFC-Kota, IFFCO-
Phulpur-I and DIL-Kanpur, their energy consumption and raw
material mix as recognized for 8th pricing period should
continue to be recognized even in Stage-II so that these units
do not suffer either undue loss or get undue benefit;
ii) In respect of other units in group III A as well as all units in
other groups, within the recommended group energy
consumption norm, the actual raw material mix of each unit
should be taken while working out base concession as well as
escalation/de-escalation. Any change in the raw material mix
of each unit should be continuously monitored by the FICC
and adjusted on annual basis. This system would ensure that
the actual mix of energy is reflected thereby eliminating any
chances of manipulation between different sources of energy unlike
the alternative of preset energy mix.
VIII. INTERNATIONAL ENERGY LEVELS:
While recommending the energy levels for Stage-II, the Committee has
kept in view the energy levels being achieved internationally for various
feedstocks. While making the international comparisons in this regard, one has
to note that the fertilizer plants in India do not depend on one single
feedstock/fuel unlike their counterparts elsewhere in the world. The differences in
methodology of computation may not always give a like to like comparison.
Notwithstanding the above, the Committee carried out comparison of energy
consumption figures of ammonia and urea plants of the three largest producers
in the world namely, USA, China and India on the basis of published data and
found that Indian plants compare favourably with plants outside India in terms of
the specific energy consumption.
The detailed analysis carried out by the Committee is attached as
Annexure-X. The results are summarized below:
Comparison with plants in USA
Feed Product Specific energy consumption (Gcal/MT of
urea)
USA India
Gas based plants Ammonia 9.94 9.16
Urea 7.27 6.63
Comparison with plants in China
Feed Product Specific energy consumption (Gcal/MT of
urea)
China India
Gas based plants Ammonia 8.77 8.51
Urea 6.29 6.10
Naphtha based
plants
Ammonia 9.25 9.28
Urea 6.76 6.43
FO based plants Ammonia 10.92 11.45
Comparison with 25% most efficient plants in the world
Particulars Average energy consumption
(Gcal/MT of urea)
World India
25% most efficient Indian ammonia plants 8.49 8.41
25% most efficient Indian urea plants 6.22 6.06
Note: - There is a slight difference in the figures quoted in the above tables. This
is because, as indicated in Annexure-X, the data in various tables has been
taken from different published sources.
While the international comparison does reveal that the Indian fertilizer
industry compares favorably with international energy consumption levels, the
improvement in the efficient use of energy is an ongoing process. As per the
new pricing policy for urea units as announced vide DoF‟s letter dated 30.1.2003,
there shall neither be any reimbursement of the investment made by a unit for
improvement in operations nor will there be any mopping up of gains of the units
as a result of operational efficiency. The fertilizer industry in the country will,
therefore, have to keep abreast of the state of the art technology in this regard.
IX. MECHANISM FOR COMPUTATION OF ESCALATION/DE-
ESCALATION
The ERC had recommended that escalations/de-escalations should be
given only in relation to main feedstock of the concerned group namely, gas,
naphtha, and FO/LSHS as the case may be. The ERC had also advocated that
escalations/de-escalations should be sanctioned based on import parity price of
naphtha and FO/LSHS. As has been pointed out earlier, the ERC had assumed
that the industry would be able to procure naphtha and FO/LSHS at import parity
price. This assumption has, however, not materialized.
The Committee noted that though the Government have decided to
dismantle the Administered Price Mechanism (APM) for the petroleum sector, the
decision has not been fully implemented in as much as the price of natural gas
still continues to be administered by the Government. Further, though the price of
naphtha and FO/LSHS is determined on the basis of import parity based formula,
there are substantial differences of perception between the fertilizer industry and
the supplying oil companies over the nuances of pricing of naphtha. Attempts
made in the past by the Ministry of Petroleum & Natural Gas to resolve the
matter in consultation with the other concerned Ministries have not borne fruit so
far. In fact, it is understood that the Ministry of P & NG have taken the stand that
fertilizer companies should deal directly with oil companies with regard to pricing
of naphtha and that after the dismantling of the APM, the Ministry would not
intervene in the matter. Of now, the oil companies are determining the price of
naphtha and FO/LSHS on their own and communicating the same to the
concerned fertilizer units. In the absence of a full-fledged regulator for the
petroleum sector as yet, it would not be possible to determine the disputes
between the two parties on the pricing methodology unless Government chooses
to intervene or there is judicial adjudication.
In view of the above, the Committee feels that there is no level playing
field for the fertilizer industry vis-à-vis the suppliers of naphtha and FO/LSHS
who have so far not been willing to permit the fertilizer industry to make use of
their infrastructure for import of naphtha and FO/LSHS. Therefore, the
Committee does not recommend escalations/de-escalations on the basis of
import parity price in respect of naphtha and FO/LSHS.
The Committee also explored the possibility of using Wholesale Price
Index (WPI), for naphtha for purposes of escalation/de-escalation. It, however,
found that the application of the formula based on WPI would at times, result in
large overpayment to some units and at other times, in significant
underpayment. The methodology for computation of WPI was discussed at
length with Economic Advisor of the Ministry of Industry, who agreed that there
was scope for further improvement in the computation of the index so that it may
reflect the variations in the price of naphtha and FO/LSHS in a more realistic
manner. Similar problems exist when the WPI is sought to be applied to other
feedstock/fuel. As the fine-tuning of WPI would take some time, the Committee
does not find it possible to place any reliance on this index for according
escalation/de-escalation in the price of naphtha/FO/LSHS in the immediate
future.
In view of this, the Committee recommends that escalation/de-
escalation in respect of feedstock/fuel should be determined on the basis
of existing methodology followed by the FICC for the first year of Stage-II.
It should be possible to take a final decision with regard to the formula for
escalation/de-escalation based either on import parity price or the refined
Wholesale Price Index before the end of the first year of Stage-II. The
Committee is of the view that the option of indexing to the import parity price
(FOB) should not be ruled out as the prices of other feedstock/fuels are fixed
largely on import parity pricing principle and the petroleum sector cannot be
insulated from the international economy beyond a certain period. Even the
price of indigenous natural gas which is administered by Government now is
proposed to be linked to market/international prices. The Committee is of the
view that the methodology recommended by it requires constant monitoring. The
methodology based either on import parity pricing formula, after such
modifications as may become necessary in the light of the policy decisions to be
taken by the Government on the pricing of natural gas, or the refined Wholesale
Price Index, may be more scientific and objective. The Government may take
appropriate decision on this after an in-depth study of the matter. The formula
given by the Committee, thus, is purely an interim one.
Accordingly, the Committee recommends that for the 1st year in Stage-
II, the formula for escalation/de-escalation in the price of feedstock/fuel be
determined as follows:
(i) (a) Escalation/De-escalation on variable cost should be worked
out based on specific energy consumption of the group.
(b) Escalation/De-escalation should be calculated on quarterly
basis.
(c) The sales tax on inputs should be calculated and paid
separately to each unit on actual basis.
(d) Escalation/De-escalation is to be calculated for each unit in
respect of variation in the prices of some components of the
variable cost namely feedstock, fuel and purchased power only.
(ii) Escalation/De-escalation for variation in the cost of inputs:
a) Escalation/De-escalation factor
Escalation/De-escalation factor (Rs./MT urea) = A x ( C – B )
A = Base weighted average specific energy consumption of the group (Gcal/MT
of Urea)
B = Base rate of energy for the unit (Rs/Gcal)
C = Actual rate of energy for the unit (Rs/Gcal)
b) Rate of energy (Rs/Gcal)
Base rate of energy (B) and actual rate of energy (C) for the unit shall be
calculated from the base data (base energy, actual mix of raw materials and
base/actual rates) as shown below:
Input Base
percent
mix of
input, %
Actual
percent
mix of
input,%
Base rate
of input
(Rs/Gcal)
Actual
rate of
input
(Rs/Gcal)
Base rate
of energy
(Rs/Gcal)
Actual
rate of
energy
(Rs/Gcal)
a b c d e =
(axc)/100
f =
(bxd)/100
NG
Naphtha
Fuel Oil
Coal
Purchased power
Total B C
c) Calculation of Escalation/ De-escalation
i) Base/ Actual rate of energy for the quarter shall be calculated for each
unit.
ii) Escalation/De-escalation factor shall then be calculated as Rs/MT
urea separately for each unit.
X. SWITCHOVER OF NON-GAS BASED UNITS TO GAS/LNG IN STAGE-
III
It has been envisaged by ERC that all the non-gas based plants shall
modernize and switchover to LNG by end of Stage-II. The terms of reference of
the Committee included suggesting a method for working out the differential cost
of feedstock for non-gas based units after Stage-II. Furthermore, the likely
scenario of the availability, pricing and infrastructure for LNG was also to be
considered by the Committee.
LNG is likely to become available in a phased manner depending upon the
infrastructure for distribution of LNG, plant technology and geographical location
of the urea units. However, the scenario about availability and pricing of LNG is
not very clear at present. In the discussions held with fertilizer industry and FAI, it
was revealed that there was no appreciable progress with regard to supply and
availability of LNG in the country and that a clear picture may emerge by year
2006. The representatives of some of the pre-1992 naphtha based as well as
FO/LSHS based urea units expressed the view that even if LNG becomes
available, switchover to LNG may not necessarily be a cheaper option
considering the initial heavy capital investment as well as the supply prices
indicated by the prospective suppliers of LNG.
The projection made by the Ministry of P&NG with regard to the supply
and demand for petroleum products and natural gas indicate that while the
surplus availability of naphtha may increase from 1.0 MMT to 4.1 MMT during the
10th Plan Period, the deficit in respect of FO/LSHS may increase from 0.5 MMT
to 5.6 MMT. In so far as LNG is concerned, the projections reveal that 3 to 4
LNG terminals, those at Dabhol, Dahej and Hazira are under construction, out of
15 which have been sanctioned, and the one at Cochin can be considered to
belong to the mature category. The Dabhol terminal is expected to commence
market gas sales from 2004-05 onwards. The other terminals appear to be
doubtful starters. On the assumption that 3 to 4 terminals will get commissioned
during the 10th Plan Period, it has been assessed that the overall potential for
imports of LNG would be in the range of 40 to 50 MMSCMD by the terminal year
of the 10th Plan. An important observation made by the Ministry of P&NG is as
follows:
“The critical requirement of successful implementation of LNG projects is
the identification and aggregation of linked bankable projects which can pay for
expensive LNG on long term basis. Hence, existence of a robust market is a
pre-requisite for LNG imports. In India, since power sector would be the anchor
market for LNG terminals, the present structure and pricing/tariff of the Indian
electricity sector may have dampened the efforts to create new power generation
capacity and thereby the demand for fuel. Under this scenario the outlook for
various LNG initiatives at this stage is difficult to establish”.
(Source: Para 8.5.8 of „Report of the Working Group on Petroleum and Natural Gas for the Tenth Five Year Plan, Government of India, Planning Commission‟)
The projected demand-supply position of natural gas at the end of the 10th
Plan almost balances at the level of supplies in the range of 140-145 MMSCMD
which are inclusive of LNG supplies (50 MMSCMD) and commencement of the
pipeline gas imports (10 MMSCMD). Further, most of the incremental domestic
supplies are expected, not from ONGC and OIL, but from the fields/discoveries of
private and joint venture companies.
There are recent reports about discoveries of large reserves of natural gas
in the Godavari basin, but their authenticity is not yet known. It is possibly in
view of the above that the Govt. of India O.M. on pricing policy for urea units
dated 30.1.2003 stipulates that the modalities of Stage-III would be worked out
after review of the implementation of Stage-I and Stage-II. The Committee is of
the view that the Government should announce the broad features of the policy
for the Stage-III at the earliest, as the industry, especially the FO/LSHS based
units, have to make substantial capital investment, if they decide to switch over to
LNG. While the construction of LNG terminals would no doubt be a critical factor,
bankable projects for LNG would be an important pre-requisite for LNG imports
for which the initiative has to come from the industry. However, the industry can
legitimately expect the announcement of the policy well in time to enable it to
take such initiative. The assumption with regard to imports of natural gas through
the pipeline may not materialize.
It is, therefore, suggested that the Government may announce its
policy for the Stage-III by 1.1.2004, by which time a clear picture should
emerge about availability, pricing etc. of LNG/NG, so that the industry may
initiate necessary steps to come up with bankable projects, based on its
commercial judgment.
It is not clear as to why the power sector is considered to be anchor
market for LNG by the Ministry of Petroleum & Natural Gas. The fertilizer sector
too, is an important player. It would be advisable to ascertain the logic behind this
perception and see that the fertilizer industry‟s case does not go by default.
XI. ENERGY LEVEL BENCHMARKING (BEYOND STAGE-II)
In fixing the preset energy level for each group for Stage-II, the Committee
has considered the weighted average group energy consumption level (excluding
outliers) arrived at on the basis of the actual operating data of the urea units in
each group pertaining to the last three years (i.e., 1999-2000 to 2001-02). For
benchmarking, it is recommended that the lowest weighted average energy
consumption level attained by a urea unit in each group in the above 3 years‟ be
considered as target energy norm beyond Stage-II for all the units in that group.
The Committee recommends that the urea industry should aspire to achieve
these target energy figures as a benchmark of efficiency. However, the benefits
that accrue to the urea units as a result of higher efficiency due to capital
investment should not be mopped up and the urea units in each group should
continue to get the concession rates based upon the energy norms fixed for the
group under Stage-II.
To achieve the benchmark energy norms, the existing urea units will have
to carry out extensive modification/revamp involving considerable investments
and import of equipment. The Committee notes that the new policy of the
Government allows the industry to retain the gains in operational efficiency that
accrue to the units due to capital investments etc. This should enable the units to
attain the most efficient energy consumption level attained by a urea unit in each
group in the three years‟ considered above.
It was brought to the notice of the Committee that financial institutions are
unwilling to entertain proposals for substantial capital investments in the fertilizer
industry in the absence of clear-cut and well-defined long term policy for the
fertilizer sector. The Committee would urge the Government to come out with
such a policy at the earliest.
The Committee recommends following target energy figures beyond
Stage-II for each group:
Group Lowest energy in the group (3 years’
weighted average energy consumption excluding outliers)
(Gcal/MT urea)
Target Energy levels recommended (Gcal/MT urea)
Group-I 5.83935 5.84
Group-II 5.49325 5.49
Group-IIIA 7.35303 7.35
Group-IIIB 5.81048 5.81
Group-IV 9.96856 9.97
Group-V 6.71407 6.71
The targets recommended above are in the nature of milestones to be
reached at the end of Stage-II. However, in view of the Government‟s decision
neither to take cognizance of capital investments made by the units nor to mop
up the gains that accrue to them from such investments, the targets may appear
to be irrelevant.
On the relevance or propriety of indicating these targets, it could be stated
that these are relevant in the larger macro-economic context and especially in
view of the increasing importance being attached to the conservation and
efficient use of energy in the country. In fact, very recently, the Energy
Conservation Act, 2001 (No. 52 of 2001) has come into force.
The Energy Conservation Act, 2001 is relevant for the fertilizer industry on
account of the following provisions it contains:
(i) The fertilizer industry is included in the schedule appended to the
Act, which gives the list of energy intensive industries and other
establishments specified as “designated consumers”.
(ii) The Central Government shall appoint the Bureau of Energy
Efficiency by a notification which will act as the eyes and ears of the
Central Government and enable the latter to discharge its
responsibilities under the Act.
(iii) The Central Government is authorized inter-alia, under the Act
(a) to establish and prescribe such energy consumption norms and
standards for different designated consumers having regard to
such factors as may be prescribed (Section 14-g),
(b) to direct the energy intensive industries included in the
schedule to get energy audit conducted by an accredited
energy auditor in such manner and intervals of time as may be
specified by regulation (Section 14-h),
(c) to direct any designated consumer to furnish to the designated
agency (any agency designated to coordinate, regulate and
enforce provisions of the Act within the concerned State) the
information with regard to energy consumed and action taken
on the recommendation of the accredited energy auditor, and,
(d) to direct any designated consumer to designate or appoint
energy manager in-charge of activities for efficient use of
energy and its conservation and also submit a report at the end
of the financial year to the designated agency.
The fertilizer industry would therefore, be very much subjected to the
directions and control of the Central Government in matters relating to energy
conservation and efficient use of energy. The targets that have been indicated
would therefore be relevant as milestones on the road to achieve the national
goal of energy conservation, notwithstanding the treatment these may receive
under the pricing formula.
XII. RECOMMENDATIONS
To recapitulate in a nutshell, the Committee recommends the following:
a) Stages
The Committee has considered the following stages for its
recommendations:
I. Stage-I – 1.4.2003 to 31.3.2004
II. Stage-II – 1.4.2004 to 31.3.2006
III. Stage-III – 1.4.2006 onwards.
b) Grouping of Plants
Existing urea units shall be grouped into the following six groups based on
feedstock and vintage:
i) Pre - 92 Gas based plants
ii) Post - 92 Gas based plants
iii) Pre - 92 Naphtha based plants
iv) Post -92 Naphtha based plants
v) FO/LSHS based plants
vi) Mixed Energy based plants
In case consumption of alternative feedstock/fuel in a gas based unit
exceeds 25%, the classification of the unit should be shifted from gas based to
the mixed energy group until the mix again changes warranting its inclusion in
the gas based group. Likewise, the classification of a unit in the mixed energy
group may also undergo similar change. This exercise should be undertaken on
an annual basis.
c) Pre-set Energy Levels for Stage-I
No recommendations on any efficiency norms for various groups during
this Stage are made. The FICC should calculate escalation/de-escalation in the
variable cost for all the urea units for Stage-I on the pattern of the current
practice under RPS.
d) Pre-set Energy Levels for Stage-II
The following pre-set energy levels at Stage-II for each group have been
recommended based on weighted average group consumption figures of energy
(excluding outliers) for the last 3 years (i.e., 1999-2000 to 2001-02):
Group Energy
levels for
Stage-II
(Gcal/MT
Urea)
Group-I 6.07
Group-II 5.80
Group-IIIA 7.77
Group-IIIB 6.21
Group-IV 10.07
Group-V 7.10
For outlier plants on the higher side in the relevant groups, the Committee
recommends a separate treatment for the first year of Stage-II (i.e., 1.4.2004 to
31.3.2005) in order to prepare them to attain the efficiency driven group energy
consumption norms. It is therefore, recommended that the specific energy
consumption norms for these outlier plants for the first year of Stage-II should be
the same as considered by the FICC in respect of these units for the 8th pricing
period and thereafter respective group energy norms would be made applicable
in respect of these outlier units also. However, the specific energy consumption
norm for both the years of Stage-II for GNFC, Bharuch, which is an outlier on the
lower side in the FO/LSHS group, should be the same as considered by the
FICC for the 8th pricing period in order to avoid any undue gain to it in adopting
the principle of group energy consumption norm for the outlier plants in the
second year of Stage-II.
The concession rates for the urea units for Stage-II may be reworked by
the FICC taking into account the recommended pre-set energy norms for Stage-
II. In order to reward efficiency in energy consumption as also to offer incentive
to all urea units to attain the pre-set levels of energy consumption in each group
during Stage-II, the pre-set group energy consumption norms may be taken for
all the urea units in the group, excluding the outliers (which have been dealt with
in the preceding paragraph) irrespective of their individual energy consumption
level, for working out base concession for Stage-II as well as for escalation/de-
escalation.
e) Raw material mix of inputs
The recommendations are as follows:
(i) In case of three plants in group-IIIA, namely, SFC-Kota,
IFFCO-Phulpur-I and DIL-Kanpur, their energy consumption
and raw material mix as recognized for 8th pricing period
should continue to be recognized even in Stage-II so that
these units do not suffer either undue loss or get undue
benefit;
(ii) In respect of other units in group III A as well as all units in
other groups, within the recommended group energy
consumption norm, the actual raw material mix of each unit
should be taken while working out base concession as well
as escalation/de-escalation. Any change in the raw material
mix of each unit should be continuously monitored by the
FICC and adjusted on annual basis.
f) Mechanism For Computation Of Escalation/ De-escalation
Escalation/de-escalation in respect of variation in the prices of some
components of the variable cost namely feedstock, fuel and purchased power
only may be worked out based on pre-set specific energy consumption of the
group on a quarterly basis and should be linked to the actual cost, of inputs net of
sales tax, for each unit for first year of Stage-II. The sales tax on inputs should be
calculated and paid separately to each unit on actual basis.
The Committee recommends that escalation/de-escalation in
respect of feedstock/fuel should be determined on the basis of existing
methodology followed by the FICC for the first year of Stage-II. The
Committee feels that it should be possible to take a final decision with
regard to the formula for escalation/de-escalation based either on import
parity price or the refined Wholesale Price Index before the end of the first
year of Stage-II and the Government may accordingly take appropriate
decision on this after in-depth study of the matter.
g) Switchover of non-gas based units to Gas/LNG in Stage-III The Committee does not have any specific recommendation to make
about Stage-III because of the uncertainty prevailing about availability, pricing
etc. of LNG/NG. It is suggested that the Government may announce its policy for
Stage-III by 1.1.2004, by which time a clear picture should emerge about
availability, pricing etc. of LNG/NG so that the industry may initiate necessary
steps to come up with bankable projects, based on its commercial judgment.
h) Energy Level Benchmarking (Beyond Stage-II)
The lowest weighted average energy consumption level attained by a
urea unit in each group in the 3 year period i.e., 1999-2000 to 2001-02 be
considered as target energy norm beyond Stage-II for all the units in that group.
The Committee recommends that the urea industry should aspire to achieve
these target energy figures as a benchmark of efficiency. However, the benefits
that accrue to the urea units as a result of higher efficiency due to capital
investment shall not be mopped up and the urea units in each group should
continue to get the energy figures fixed for the group under Stage-II.
The Committee recommends following target energy figures beyond
Stage-II for each group:
Group Target Energy levels (Gcal/MT urea)
Group-I 5.84
Group-II 5.49
Group-IIIA 7.35
Group-IIIB 5.81
Group-IV 9.97
Group-V 6.71
The Committee feels that these targets are relevant as milestones to
achieving the national goal of energy conservation as enshrined in the Energy
Conservation Act, 2001.
i) General Recommendation
Whereas, the Committee has taken every care to analyze the various
issues related to its terms of reference, it realizes that the calculation of
concession to be paid to the urea units in different groups during Stages-I and II
is a complex exercise and may involve consideration and calculation of
innumerable factors which it has not been possible to cover in this Report. It is,
therefore, suggested that in case of any anomaly or any calculation not
specifically recommended in or covered by the Report, the FICC, in consultation
with the Department of Fertilizers may take appropriate decision in the matter.
(Pratap Narayan) (C. Ramaswamy) (G.B. Purohit)
Member Member Member
(V.K. Bali) (R.N.Choubey) (Manoj Kumar)
Member Member Member Secretary
(A.V. Gokak)
Chairman
***
Chairman’s comments on certain issues raised by two members
I have gone through the dissenting note (enclosed), which was received
on 2nd May, 2003 from Shri R.N. Choube, who was earlier a member of the
Committee, in his capacity as Joint Secretary (Plan Finance-II), Department of
Expenditure. It may be emphasized that the draft report of the Committee was
circulated to the members earlier on 31.1.2003, much in advance of the next
meeting on 14.2.2003 and the last meeting on 12th March., 2003. Neither any
written comments were received nor was the meeting attended by Shri R.N.
Choubey or his successor. I wish either Shri Choube or his successor had
attended the meeting as it would have facilitated a better appreciation of every
body‟s point of view at the final stage of deliberations. I have given careful
consideration to the points raised by Shri Choube. In fact, most of the points
raised by him were discussed in the course of the Committee‟s deliberations.
The basic thrust of Shri Choube‟s note appears to be that if actual
consumption is below the norms proposed by the Committee, the actuals should
be recognized as otherwise it would lead to inefficiency and no reduction in
subsidy due to unintended benefit accruing to such units. I would like to deal with
this major issue first before dealing with the specific points raised in his note.
In this context, the merits and demerits of pricing, based on both
normative basis or actual cost basis have to be considered. The former has the
advantage of increasing efficiency as any improvement over norm improves
profitability, and discouraging inefficient performance, as the same results in
lower profitability or even loss. Pricing on actual cost basis, however, does not
offer any incentive for improved performance (as gains get mopped up) nor
discourages inefficient performance due to recognition of actual cost. The
concept of recognizing norm or actual, whichever is lower, conveys a wrong
signal to the units that it does not pay to improve performance. Even ERC, which
brought in the Group Pricing Concept, recommended a common norm for its
calculation and did not envisage recognition of actual or norm, whichever is
lower. In a normative system, it is inherent that once the norm is fixed on a
reasonable efficiency level, more efficient units are rewarded by better
profitability while inefficient units are penalized by way of lower profitability or
even loss.
Another important consideration is that, under normative pricing
mechanism, it has to be taken as a package; while there may be advantage
under certain items, there is also disadvantage under certain other items and the
loss and gain have to be taken together. If only gain under certain items is taken,
ignoring loss under certain other items, it renders administered pricing
mechanism irrational and un-remunerative to the industry.
The points raised above become all the more relevant when a conscious
effort is made to move away from individual unit based retention pricing scheme
to a group pricing scheme. On this major issue, I have not been able to
pursuade myself to the point of view expressed by Shri Choube.
I now come to the specific points raised by Shri Choube.
(I) Annual Review of Consumption Pattern:
Shri Choube has opposed the recommendation of the Committee to
annually review the placement of an individual unit in a particular group
depending upon change in consumption pattern. This recommendation has been
misunderstood by him. It is well known that that due to inadequate availability of
gas, plants in Groups I, II and V (Pre-92 and Post-92 gas based and mixed
energy group plants) are required to use alternative feed and fuel like Naphtha;
and the pattern of usage changes from year to year. Naphtha energy is four
times costlier than energy through gas. If a gas based plant does not get
adequate supply in the event of shortage of gas, and its usage of naphtha goes
up beyond 25% (which has been taken as a cut off level for classification of
plants as gas based or mixed feed), it would seriously jeopardize the viability of
such a unit by continuing it in the gas based group. Conversely, if increasing gas
supply is available to a mixed feed plant, and its usage of naphtha goes below
25%, it would get undue gains if it continues to be classified as a mixed feed
plant.
This point is well illustrated by NFCL-II case. It was commissioned as a
naphtha based plant and was also treated as such by ERC in its grouping.
However, due to subsequent higher availability of gas, increasing gas quantities
have been used and, therefore, the Committee has included it under group II
(Post-92 gas based plant). But there is yet no long term commitment of gas for
this plant; the present availability is mainly due to default of other users in their
off-take of allocated gas. If the situation reverses, the Committee considers it
appropriate to take it back to the mixed feed stock group so that the unit does not
suffer unintended loss.
Similarly, when LNG becomes available, it is likely that some naphtha
based units may change over to LNG. At that stage, such units will neither fit in
naphtha nor gas group because of differential capital as well as variable cost
structure and it may be necessary, to put such plants in a separate group
depending upon vintage.
The Committee, therefore, considers it appropriate to make a provision for
annual review so that neither the units suffer unintended loss nor get unintended
profit due to changing pattern of gas availability.
(II) Validation of Data by Government:
As regards the need for validation of the data by the Government, I would
like to emphasize that the entire data collected by the Committee was through
Department of Fertilizers. ED, FICC and Joint Advisor, Department of Fertilizers
have also been associated with the Committee as special invitees from the very
beginning. The relevant data has been with us for over eight months and neither
DOF nor FICC has pointed out any inaccuracy and the Committee cannot be
expected to make its recommendations on doubtful data.
Nonetheless, the Committee itself has, at the end of part IV(C) noted that
“the basic figures as also conversion calculations in Gcal of energy as given by
each urea unit are liable to be scrutinized by the Government at its own level”
(III) Regarding Outliers:
While Shri Choube has agreed to the exclusion, as outliers, of units having
energy consumption higher than 20% over the weighted average for the group in
recommending the norm, he has opposed exclusion of GNFC in Group IV whose
energy consumption is lower by more that 20% than the weighted group average.
The concept of excluding „outliers‟ is to ensure that too high or too low
consumption does not vitiate a reasonable norm determination. Consistency
demands that either, the weighted average of all units can be taken or all
„outliers‟ having too low or too high consumption be excluded.
That apart, as has been pointed out in Note 5 at page 15 of the Report,
there are other reasons that justify treatment of GNFC as an outlier. There is
significant difference in the size (offering benefit of economies of scale) in case of
Ammonia Plant (1350 TPD single stream) of GNFC as compared to other units
(900 TPD or lower) in the FO/LSHS Group. Further, the units included in the
Group have adopted technologies that were available at the relevant points of
time. GNFC uses Texaco process, which operates at a much higher pressure
while NFL and Sindri plants are based on Shell Gassification process which
operate at a lower pressure. Liquid oxygen is used in Texaco process against
compressed gaseous oxygen in shell process. These major technological
features result in significant differential energy usage in favour of GNFC. Hence,
inclusion of a unit having extremely low consumption in working out the Group
norm would have rendered it totally unrealistic not capable of achievement by
other units. Incidentally, this is in keeping with the new pricing scheme of the
Department of Fertilizers, under which units whose retention prices deviate by
plus minus 20% are treated as outliers while working out the group concessions.
However, to ensure that neither the outliers gain fortuitous benefit nor
suffer heavy loss, the Committee has recommended a transition period upto the
first year of Stage-II (giving them two years time) during which the existing norms
as under 7th and 8th pricing periods should continue as these are supposed to
have been fixed on a normative basis. From the second year of Stage-II, all units
are expected to fall in line with the recommended group-wise norm.
(IV) Taking best consumption of last three years as norm instead of three years’ weighted average:
Shri Choube is misinterpreting the Committee‟s rationale in taking 3 years
weighted average of energy consumption (excluding outliers) while
recommending the group norm. As has been clearly brought out in para VI, a
single year‟s data may not be true representative of a performance that can be
sustained over a long period as the same is influenced by internal as well as
external factors (some of which have been explained) and availability of
feedstock, particularly gas, is only one of the factors and not the only factor. The
analysis of the data revealed wide fluctuations from year to year as clearly
mentioned in this para. A perusal of the data presented in the Annexures will
show that the year in which the best weighted average consumption was
achieved does not necessarily mean that every plant in the group had the best
performance. For instance in case of Group-III A (pre-92 naphtha based plants),
the lowest average energy consumption was achieved in the year 2001-02, both
including and excluding outliers. However, out of 8 plants in the Group, in case of
5 plants the energy consumption in the preceding year (2000-01) was lower while
in case of only 3 plants it was lower during 2001-02 bringing down the weighted
average. That is why the Committee did not base its recommendations on a
single years performance, excluding outliers, but on three years performance so
that such fluctuations are evened out and realistic norms are fixed.
(V) Regarding adopting actual during 2002-03 or group norm, whichever is lower, in Stage-II:
Shri Choube has suggested that instead of adopting group consumption
norm for all the units excluding outliers recommended by the Committee, the
group energy norm or the actual achieved by the unit in 2002-03 (which, in any
case, is not relevant to the deliberations of Committee) whichever is lower,
should be adopted. I am afraid I am unable to agree to this approach for the
reasons already mentioned earlier in this note.
Apart from the dissenting note of Shri Choube, Shri Manoj Kumar,
Member Secretary of the Committee has pointed out that generally the benefit of
increased efficiency due to capital investment without mopping it up is given to
an industry when it has shown motivation and resolve to attain some pre-set
goals. In the present case, the Committee has taken this goal, for the period
beyond Stage-II, to be the energy consumption level fixed for Stage-II only. Now,
this energy consumption level for Stage-II itself is not a normative goal to be
achieved by all the urea units in any particular group for the simple reason that it
is the weighted average group energy consumption level (excluding outliers)
arrived at on the basis of the actual operating data of the urea units in each
group pertaining to the last three years. As such, there are many urea units
which are even today (on the basis of the energy consumption data of the last
year analyzed i.e. 2001-02) showing more efficient energy consumption than the
weighted average group energy consumption level fixed for Stage-II for the
period 1.4.2004 to 31.3.2006. To recommend that even beyond Stage-II (i.e.
beyond 31.3.2006), they should be given the group energy levels recommended
for Stage-II would not only be against the present ground realties but would also
result in extra financial gains to many units without making any extra efforts to be
more efficient than their performance in the year 2001-02.
Shri Manoj Kumar has further stated that the aim of recommending energy
efficiency norms for urea units and addressing allied issues under the New
Pricing Policy for urea units on the basis of the recommendations of the
Committee is not only to motivate urea units to increase their energy efficiency
and to become more competitive internationally but also to function in an
economic environment which results in a decrease in the subsidy burden on the
Government. Therefore, the target energy consumption level for the urea units
beyond Stage-II (i.e. beyond 31.3.2006) should be somewhat lower than the
mere adoption of the norms fixed for Stage-II. If the urea units are to be allowed
to retain the benefits of energy efficiency in this stage , then it should be only with
reference to further reduction in energy consumption than what has already been
achieved in 2001-02.
On the observations of Shri Manoj Kumar, the general reasons given at
the beginning of this note are applicable with equal force in this case also. Even
on merits, this does not present a complete picture. While it is true that some
units have already achieved lower energy consumption, than the norm
recommended by the Committee for Stage-II, it is also true that much higher
number of units have higher energy consumption than the norm. Also for Stage-
III and beyond, as many as 25 units out of 32 will have to improve their energy
efficiency to come up to the benchmark level recommended by the Committee.
This again will entail investment and that is why the Committee has
recommended continuation of energy norms of stage-II in stage-III onwards also
and at the same time non-recognition of investment. The following table will
clearly illustrate the loss/gain in respect of units in each group: -
Group Total no. Number of units with energy consumption Of units Above norm Above benchmark Recommended norm recommended
For stage-II for stage III onwards
I 6 4 5
II 7 4 6
III A 8 5 7
III B 2 1 1
IV 6 3 4
V 3 2 2
_________________________________________________
Total 32 19 25
In the circumstances, I would like to reiterate the recommendation that the
dispensation suggested for Stage-II (including in respect of consumption for 3
units in group III-A where the total energy cost is lower, as compared to other
units, despite higher energy consumption due to use of inefficient but cheaper
source of energy in the form of coal) should be continued in Stage-III also. This
would bring stability in the pricing mechanism and at the same time provide
strong incentive to the industry to further improve efficiency, serving the overall
national goal of energy conservation.
This apart, it is not correct to assume that a unit which has already
achieved the norm at the beginning of Stage-II will not strive to improve its
efficiency. Each unit will try to improve its competitive advantage in the aftermath
of the government‟s declared policy of lifting distribution controls initially and
eventually moving towards total decontrol. The policy of neither recognizing the
investment nor moping up the gain would also motivate the units to strive for
keeping their competitive advantage in tact. Moreover with the coming into force
of the Energy Conservation Act, 2001 the competent authority under that Act
would also ensure that the larger issue of energy efficiency is taken care of and
that no complacency creeps in, in the future.
The Committee has, after careful consideration, come to the conclusion
that at the present juncture, determination of norms at a level lower than those
recommended by the Committee would be beyond the realm of feasibility,
especially in view of the extremely heterogeneous nature of the industry and the
different technologies it has adopted.
Recommendations of Shri R.N. Choubey Joint Secretary (Plan Finance II), Department of Expenditure
(i) As far as the revision in the groups due to change in the feedstock
consumption pattern is concerned, there is no need to undertake it on
an annual basis, as proposed. The groupings may be reconsidered
only after the position of availability of gas improves considerably and
at that stage, groupings for the Group Based Concession Scheme as
well as these groupings would need to be reconsidered. That may
well be the stage III itself.
(ii) The entire data upon which the report is based needs to be validated
by Department of Fertilizer.
(iii) The proposed group energy norms for Stage II have been derived
through a statistical process. In this process the units whose
consumption norms are +/- 20% from the group-weighted average
have not been considered for calculation of group average.
Consumption norms are meant to promote efficiency. Leaving out
outliers i.e. those whose consumption is more than 20% of the group
average is agreed to. However, in Group IV i.e. FO/LSHS group,
GNFC has been treated as the outlier simply because its
consumption is on the lower side of the group average. Methodology
of treating units whose consumption norms are (-) 20% from the
group average as outlier is not acceptable. This will only promote
inefficiency.
(iv) The preset energy levels for State II have been fixed on the basis of
three years average excluding the outliers. The main argument for
doing so is non-availability of gas. The gas scenario has not
changed appreciably during the last couple of years. The position of
shortage has been there for the past few years. Therefore, non-
availability of gas cannot be a ground for taking up three years
average as consumption norm. Most of the units have shown an
improvement in the past few years in the consumption norms. An
averaging of three years negates this advantage and thus increases
the subsidy burden. Taking up three year‟s average amounts to
building inefficiency into the norms. As an alternative the best
consumption of the last three years may be taken as consumption
norm for Stage II.
(v) It has been recommended that the group norm may be applied for all
the units in the group irrespective of their individual energy
consumption levels. This gives an unearned benefit to those units
who are already below the group energy norm. It is suggested that
the group energy norm or the norm attained by the company during
the year 2002-03 whichever is lower would be made applicable and
should continue till group norms are reviewed again. This would take
away unearned benefits that a company might earn, at the same time
it would permit a company to keep its efficiency gains.
Annexure-I Executive Summary
Background and Objectives 1. Fertilizer subsidies have grown dramatically and continue to increase rapidly.
The green revolution technology is now widely accepted and the need to
subsidize fertilizers to induce farmers to increase their usage has gone down.
2. The Retention Price Scheme (RPS) has led to the development of a large
domestic industry and near self-sufficiency. However, the unit wise RPS is a cost
plus scheme. It results in high cost fertilizers, excess payments to industry and
provides no incentives to be cost efficient. Moreover, it is extremely difficult, if not
impossible, to administer it without these disadvantages.
3. The fertilizer policy needs to be reformed. The goal of new policy should be to
eventually bring fertilizer prices charged to farmers to the level of import parity
price. It should protect small farmers‟ real incomes, should not lead to a slump in
food production and promote a balanced use of N, P and K. At the same time,
the RPS needs to be dismantled and replaced by an easily enforceable system
that provides incentives to manufacturers to be cost efficient, and ensures a
desired level of self-sufficiency with minimal support from the government.
4. A sudden increase in farm-gate price of urea to import parity price, without
increasing procurement prices, could lead to a fall of 13.5 million tonnes of
foodgrains production. This is thus, not a feasible option.
Protecting Small farmers 5. If procurement prices are raised along with farm-gate prices of fertilizers, the
fall would be much smaller. However, small and marginal farmers for whom self
consumption is a large part of their output, would suffer a loss in their real
incomes.
They should be protected. Two possible ways are:
(a) Introduction of a dual price scheme under which all cultivator households
are given 120 Kgs. of fertilizers at subsidized prices and
(b) Expansion of Employment Guarantee Scheme and rural works programmes
to provide additional incomes to small farmers. If such rural programmes are
directed towards improvement of land and development of minor irrigation
schemes, they will in addition to providing wage income, increase productivity of
land and income to farmers even when fertilizer prices are increased.
From RPS to Competitive Self-reliance Urea 7. A complete decontrol of producer price for urea would have been possible,
were all our plants based on natural gas as feedstock. Unfortunately, only 56
percent of domestic capacity is gas based, 22 percent naphtha based, 9 percent
fuel oil based and 12 percent is mixed feedstock based mostly naphtha and
natural gas.
8. A sudden freeing of the urea industry could lead to most naphtha based units
having to close down, as even their short run variable costs would be higher than
the import price. The resultant surge in the demand for imports would push up
import prices to levels which would lead to much higher quantum of subsidy than
now, if the demand is to be maintained at 21 million tonnes of urea.
9. Since availability of natural gas is limited, a good proportion of the production
has to be based on other feedstock if a certain level of self-sufficiency is to be
maintained. These plants would have to be compensated for their higher cost of
feedstock.
10. The best possible alternative at present is imported liquefied natural gas
(LNG).
11. In the circumstances, the Commission recommends the dismantling of the
control system in a phased manner, leading at the commencement of fourth
stage, to a decontrolled fertilizer industry which can compete with import albeit
with a small level of protection and a feedstock cost differential compensation to
naphtha/LNG based units to ensure self-sufficiency. The scheme envisaged is in
the spirit of the recommendations of the HPRC. The transition however has to be
gradual.
12. The transition begins with the discontinuation of the RPS with effect from
February 1, 2001, and introduction of a group-wise concession scheme. The
number of groups is reduced from five to two by April 1, 2006. At this stage all
units except those that are based on naphtha/LNG would be viable at a price of
about Rs. 7000 per tonne of urea. For naphtha/LNG based units a Feedstock
Differential Cost Reimbursement (FDCR) of Rs. 1900 per tonne of urea will be
given. The details of the various stages are as follows:
(i) In the first phase beginning February 1, 2001, the following will be done:
(a) The existing units will be grouped into 5 categories – pre-1992 gas based
units, post 1992 gas based units, naphtha based units, FO/LSHS based units
and mixed feedstock units. The individual retention price scheme will be
scrapped and in its place a Urea Concession Scheme with a fixed amount of
concession for each of these groups will be introduced. At the same time, plants
would be free to get feed stock from wherever they want including imports.
(b) The distribution control mechanism will be done away with.
(c) The maximum retail price arrangement will be continued, the concessions for
each group being so calibrated as to enable the units to sell at the stipulated
maximum retail price.
(d) Having regard to the large fluctuations in the import prices of feedstocks, it
will be necessary to redetermine the concession to these groups of units every
three months with reference to the prevailing import prices. When there is a
reduction in the import parity prices of these feedstocks, the concession payable
to the units would go down. It may be noted that this, however, is done only
group-wise and not plant-wise. Whenever there is an increase in the import parity
prices of these feedstocks, the additional costs should be passed on to the
consumers through a suitable increase in the maximum retail price so that the
total amount payable by way of concessions does not go up significantly. The
revision in issue price to farmers however, should be done every season rather
than every three months.
(ii). In the second stage, beginning 1st April 2002, the concessions are reduced
to reflect the possibility of reasonable improvement in feedstock usage
efficiencies and reduction in capital related charges.
(iii). The third phase will begin on 1st April 2005 and reflects the feasibility of all
non gas based plants to modernize and switch-over to LNG. For plants which do
not switch over to LNG as feedstock only the level of concession that the unit
would have been entitled to if it had switched over to LNG would be allowed.
(iv). The fourth phase begins on 1.4.2006 when the industry is decontrolled. The
Commission recommends a 7 % increase in the price of urea in real terms every
year from 1.4.2001. This way the open market price will reach Rs. 6903 by
1.4.2006, a level at which the industry can be freed from all controls and be
required to compete with imports, with variable levy ensuring availability of such
imports at the farm-gate at Rs. 7000 per tonne of urea. While no concessions will
be necessary from this date onwards for gas based, FO/LSHS and mixed feed
stock plants, existing naphtha plants converting to LNG as also new plants and
substantial additions to existing plants will be entitled to a feedstock differential
with that for LNG plants serving as a ceiling.
13. The schedule of concessions are shown in the Table 1:
Table 1 : Schedule of concessions
Feedstock Ist Stage concession (Rs./MT)
IInd Stage
IIIrd Stage
IVth Stage
Based on existing RPS and domestic Price of Inputs
Savings at
import Parity Price
Net concession 1.2.2001 to 31.3.2002
1.4.2002 to
31.3.2005
(Rs./MT)
1.4.2005 to
31.3.2006
from 1.4.2006
1. 2. 3. 4. 5. 6.
Natural
Gas Pre 1992
Post 1992
Naphtha
FO/LSHS
Mixed
feed stock
1300
2900
8400
6400
4000
0
0
1900
3250
600
1300
2900
6500
3150
3400
1050
2450
5800
2200
3000
800
2000
3900
2200
2450
0
0
1900
0
0
New Plants : For non gas based new plants or substantial additions to existing plants would be given appropriate feedstock differential subject to the feedstock differential for LNG plants acting as the ceiling. Notes: (a) The concessions in column (1) are so determined that along with the net
receipt of Rs.4000 from the farm-gate price of Rs.4600, the concession gives
nearly the weighted average retention price to each group.
(b) Column (3) shows the savings that can result in stage I, if feedstocks are at
import parity prices. Freeing of imports will ensure that plants get feedstock at
such prices by February 1,2001.
(c) The reduction in column (4) compared to column (3) reflects change in
feedstock use efficiency in stage II. Modest achievable targets have been
assumed and plants are expected to attain them by 31st March, 2002.
(d) Column (5) reflects the concession in the third stage, incorporating the further
reduction on account of non gas based units switching over to LNG as feedstock.
(e) Column (6) reflects the concession, by way of feedstock differential only in the
fourth stage commencing 1.4.2006 when the industry is decontrolled and the
imports are made available at Rs.7000 per tonne at the farmgate.
(f) In all the three stages the final concession levels, as determined also take into
account the progressive reduction in capital recovery charges.
(g) The Commission has recommended a price increase of 7 % in real terms per
annum from 1.4.2001, reaching Rs.7000 on 1.4.2006. To the extent of price
increase in earlier years, the concession indicated in columns 3,4 and 5 would
stand reduced.
14. The schedule of subsidy outlay under various stages is given in Table 2. Table 2 : Urea subsidy outlay in different phases (Rs.Crores/year)
2000-01
2001-02
2002-05 2005-06 April 1, 2006 onwards
a) No increase in Issue price
Farm-gate price - Rs./mt of urea
4,600 4,600 4,600 4,600 4,600
Concession to industry
9,155 7,204 6,159 4,656 5,837
b) Increase in issue price @ 7 % p.a.
Farm-gate price - Rs./mt of urea
4,600 4,922 5,267 to 6030
6,452 7,000
Concession to industry (net)
9,155 6,556 4,817 to 3,280
927 1,004
c) Cost of coupon system :
Coupons to 105 million farmers At 80 Kgs. of urea per family to be supplied At Rs.4,600 per Mt
270 560 to 1201
1,556 2,016
Phosphatic and Potassic Fertilizers: 15. The farm-gate prices of nitrogenous, phosphatic and potassic fertilizers
should be set to promote a desired balance of fertilizer use. In the circumstances
the ERC will only suggest that once urea price is re-determined every six
months, the prices of potassic and phosphatic fertilizers should be suitably
adjusted, as advised by the Ministry of Agriculture to ensure the desired NPK
balance. It will be useful if government could announce in advance the formula to
be adopted for fixing the prices of P & K fertilizers with reference to a given urea
price.
16. Phosphatic fertilizers are already decontrolled and operated with a
concession scheme. With one more unit commissioned last year for the
manufacture of 1.5 million tonnes of DAP based on imported rock phosphate and
sulphur, the proportion of DAP manufactured, based on imported ammonia and
imported phosphoric acid will go down sharply. The appropriateness of
continuing with the present arrangement of giving a uniform rate of subsidy to all
the units, with reference to cost of production of DAP based on imported
ammonia and imported phosphoric acid needs to be examined preferably by the
Tariff Commission.
General 17. The arrangements for the payment of concessions to industrial/importing
firms need to be streamlined so as to ensure payment of the amounts due to the
units within three to four weeks from the time of sales. Once such arrangements
are in place, then in the case of urea also the payment of concessions could be
shifted from „despatch‟ to „sales‟.
18. As it is basically a question of dealing with industrial units – at least in the
case of DAP – these subsidies should appropriately be administered by the
Ministry of Chemicals and Fertilizers, along with the concessions for the urea
units. The Ministry of Agriculture will continue to have a major role in the fixation
of the maximum retail/indicative prices for all types of fertilizers, be it N or P or K.
19. The Commission recommends that if a state government imposes any
additional burden, by way of excessive levies on the inputs or on finished
fertilizers manufactured/sold in the state then these costs should be passed on to
the farmers in that state.
To Conclude:
20. The Commission wishes to emphasize that the suggested scheme to take the
fertilizer industry to a liberalized competitive set up :
- Retains self sufficiency - Preserves viability of existing units - Protects small farmers - Reduces subsidy outlay and - Is implementable.
Annexure-II-A No. 12019/14/2002-FPP-II
Government of India Ministry of Chemicals & Fertilizers
Department of Fertilizers ….
Shastri Bhawan, New Delhi 25th June, 2001.
Office Memorandum
Subject: Constitution of a Committee to examine the recommendations
made by the Expenditure Reforms Commission – regarding The Expenditure Reforms Commission (ERC), while recommending
Group Concession Scheme for urea manufacturing units, has envisaged
improvement in the energy efficiency in the Stage-II of the proposed scheme.
The report has indicated certain energy consumption norms for the non-gas
based units. The Department of Fertilizers, however, proposes to announce the
pre-set energy consumption norms for each Group, including the gas based
units. It has been decided to constitute a committee consisting of the following:
1. Shri A.V. Gokak, former Secretary, DOF, Chairman.
2. Shri Pratap Narain, former DG, FAI, Member
3. Shri Ramaswamy, former Chief Adviser, BICP Member
4. Shri V.K. Bali, ED(Tech.), IFFCO Member
5. Dr. G.B. Purohit, former Adviser (F), DOF Member
6. Shri M.R. Sharma, DS, DOF Member Secretary
2. The Committee will suggest efficient energy levels for the urea
manufacturing units keeping in view the existing norms and the norms which the
modern plants are expected to achieve. The Committee may also refer to the
energy consumption levels suggested by ERC. The Committee, while
recommending the energy levels, would also examine the desirability of
feedstock/technology based efficient energy levels and possible milestone in
terms of achieving international standards.
3. The Committee will suggest mechanism for determining the escalation
and de-escalation in the feedstock cost for various units/groups.
4. The Committee will suggest mechanism for feedstock differential cost in
respect of various non-gas based units after the Stage-II keeping in view the
likely scenario about availability, pricing and infrastructure required for the LNG.
5. The Committee will suggest the mechanism for treatment of substitution
of feedstock due to non-availability of gas/LNG etc.
6. The Committee will start functioning from 1.7.2002 and give its report by
31.8.2002.
7. A sitting fee of Rs. 1000/- per day will be paid to non-official members of
the Committee.
8. TA/DA will be regulated as per extant Government rules.
9. Secretariat assistance to the Committee will be provided by the
Department of Fertilizers. Shri S. Chandra, Joint Adviser, Department of
Fertilizers shall also be associated with the Committee for technical assistance.
11. This issues with the approval of Internal Finance Division vide their Dy.
No. C-190/FA/2002 dated 24.6.2002.
Sd/-
(Balvinder Kumar)
Joint Secretary to the Government of India
Tel: 23388481
Copy to:
1. All members of the Committee
2. Guard File
Copy also to:
1. PS to Minister (C&F)
2. PS to MOS(C&F)
3. Sr. PPS to Secretary (F)
4. ED, FICC
Annexure-II-B
No. 12019/14/2002-FPP-II Government of India
Ministry of Chemicals & Fertilizers Department of Fertilizers
…. Shastri Bhawan, New Delhi
28th August 2002
Office Memorandum Subject: Constitution of a Committee to examine the recommendations
made by the Expenditure Reforms Commission – regarding
In continuation of this Department‟s OM of even number dated 25.6.2002
constituting a Committee under the chairmanship of Shri A.V. Gokak, former
Secretary (Fertilizers), inter-alia to suggest efficient energy levels for urea units
during Stage-II of proposed Group Concession Scheme keeping in view ERC
recommendations, and the mechanism for determining the escalation and de-
escalation in the feedstock cost for various units/groups etc., Shri R.N. Choubey,
Joint Secretary (PF-II), Department of Expenditure, Ministry of Finance, is
nominated as member of the above-mentioned Committee with immediate effect.
-sd
(Manoj Kumar) Director
Copy to: 1. Shri A.V. Gokak, Former Secretary, Department of Fertilizers, 525-Meera Cottage, 11th Cross Rajmahal, Villas Extension, Sadashiv Nagar, Bangalore. 2. Shri Pratap Narayan, Former Director General, Fertilizer Association of India, 59-B, Friends Colony East, Western Avenue, New Delhi-110065. 3. Shri C. Ramaswamy, Former Chief Advisor, BICP, EA-28, SFS Flats, Maya Enclave, Hari Nagar, New Delhi.
4. Dr.G.B. Purohit, Former Advisor, Department of Fertilizers, N-25, D-Saket, New Delhi. 5. Shri V.K. Bali, Executive Director (Technical), Indian Farmers Fertiliser Cooperative Ltd., IFFCO House, 34, Nehru Place, New Delhi. 6. Shri R.N. Choubey, Joint Secretary (PF-II), Department of Expenditure, Ministry of Finance, North Block, New Delhi. 7. Shri Srichandra, Joint Adviser(F), DOF
Copy also to: 1. Shri C.S. Rao, Secretary, Department of Expenditure, Ministry of Finance, North block, New Delhi. 2. PS to M(C&F) 3. PS to MOS(C&F) 4. SrPPS to Secretary (F) 5. JS(F) 6. ED, FICC
-sd
(Manoj Kumar) Director
No. 12019/14/2002-FPP-II
Government of India Ministry of Chemicals & Fertilizers
Department of Fertilizers ….
Shastri Bhawan, New Delhi 24th March 2003
Office Memorandum
Subject: Constitution of a Committee to examine the recommendations made by the Expenditure Reforms Commission – regarding
In continuation of this Department‟s OM of even number dated 28.8.2002
nominating Shri R.N. Chaubey, the then Joint Secretary (PF-II), Department of
Expenditure, Ministry of Finance, as member of the Committee constituted under
the chairmanship of Shri A.V. Gokak, former Secretary (Fertilizers), inter-alia to
suggest efficient energy levels for urea units during Stage-II of proposed Group
Concession Scheme keeping in view ERC recommendations, and the
mechanism for determining the escalation and de-escalation in the feedstock
cost for various units/groups etc. and consequent upon Shri Chaubey‟s
appointment as Joint Secretary in the Finance Commission, Shri Vivek Rae, Joint
Secretary (PF-II), Department of Expenditure, Ministry of Finance, is nominated
as member of the above-mentioned Committee with immediate effect in place of
Shri R.N. Chaubey.
-sd (Manoj Kumar)
Director
Copy to:
1. Shri A.V. Gokak, Former Secretary, Department of Fertilizers, 525-Meera Cottage, 11th Cross Rajmahal, Villas Extension, Sadashiv Nagar, Bangalore.
2. Shri Pratap Narayan, Former Director General, Fertilizer Association of India, C-47, Friends Colony East, New Delhi-110065.
3. Shri C. Ramaswamy, Former Chief Advisor, BICP, EA-28, SFS Flats, Maya Enclave, Hari Nagar, New Delhi.
4. Dr.G.B. Purohit, Former Advisor, Department of Fertilizers, N-25, D-Saket, New Delhi.
5. Shri V.K. Bali, Executive Director (Technical), Indian Farmers Fertilizer Cooperative Ltd., IFFCO House, 34, Nehru Place, New Delhi.
6. Shri Vivek Ray, Joint Secretary (PF-II), Department of Expenditure, Ministry of Finance, North Block, New Delhi.
7. Shri R.N. Choubey, Joint Secretary, Finance Commission, Jawahar Vyapar Bhawan, Tolstoy Marg, New Delhi.
8. Shri Srichandra, Joint Adviser(F), DOF
Copy also to: 1. Shri C.S. Rao, Secretary, Department of Expenditure, Ministry of Finance, North block, New Delhi. 2. PS to M(C&F) 3. PS to MOS(C&F) 4. SrPPS to Secretary (F) 5. JS (F) 6. ED, FICC
-sd (Manoj Kumar)
Director
No. 12019/14/2002-FPP-II
Government of India Ministry of Chemicals & Fertilizers
Department of Fertilizers ….
Shastri Bhawan, New Delhi 1st April 2003
Office Memorandum
Subject: Constitution of a Committee to examine the recommendations
made by the Expenditure Reforms Commission – regarding
The undersigned is directed to refer to this Department‟s OM of even
number dated 25.6.2002 constituting a Committee under the chairmanship of
Shri A.V. Gokak, former Secretary (Fertilizers), inter-alia to suggest efficient
energy levels for urea units during Stage-II of the new pricing scheme keeping in
view the ERC recommendations, and the mechanism for determining the
escalation and de-escalation in the feedstock cost for various units/groups etc.,
and wherein Shri M.R. Sharma, Deputy Secretary was nominated as Member
Secretary. Since Shri M.R. Sharma was relieved of his duties in this Department
w.e.f 29.7.2002 consequent on his appointment as Private Secretary to the
Minister of State for Shipping, Shri Manoj Kumar, Director, will act as Member
Secretary to the Committee w.e.f 29.7.2002.
-sd (Manish Gupta)
Deputy Secretary
Copy to:
1. Shri A.V. Gokak, Former Secretary, Department of Fertilizers, 525-Meera Cottage, 11th Cross Rajmahal, Villas Extension, Sadashiv Nagar, Bangalore.
2. Shri Pratap Narayan, Former Director General, Fertilizer Association of
India, C-47, Friends Colony East, New Delhi-110065.
3. Shri C. Ramaswamy, Former Chief Advisor (Cost), Department of
Expenditure, EA-28, SFS Flats, Maya Enclave, Hari Nagar, New Delhi.
4. Dr.G.B. Purohit, Former Advisor, Department of Fertilizers, N-25, D-Saket, New Delhi.
5. Shri V.K. Bali, Executive Director (Technical), Indian Farmers Fertiliser
Cooperative Ltd., IFFCO House, 34, Nehru Place, New Delhi.
6. Shri Vivek Rae, Joint Secretary (PF-II), Department of Expenditure, Ministry of Finance, North Block, New Delhi.
7. Shri Srichandra, Joint Adviser(F), DOF.
8. Shri Manoj Kumar, Director, DOF.
Copy also to: 1. JS (F) 2. ED, FICC
-sd (Manish Gupta)
Deputy Secretary
Annexure-II-C No. 12019/5/98-FPP Government of India
Ministry of Chemicals & Fertilizers Department of Fertilizers
…
Shastri Bhawan, New Delhi. January 30, 2003
To,
The Executive Director, Fertilizer Industry Coordination Committee, 8th Floor, Sewa Bhawan, R.K. Puram, New Delhi.
Subject: Pricing policy for urea manufacturing units
Madam,
I am directed to say that the Government have approved a new pricing policy for urea
units which will replace the existing Retention Price Scheme and will come into effect from
1.4.2003. Salient features of the policy as also the modalities for implementation of the
Scheme are as follows:
1. The primary consideration and goal of the new pricing policy is to encourage efficiency
parameters of international standards based on the usage of the most efficient feedstock,
state-of-art technology and also ensure viable rate of return to the units. The new scheme will
come into effect from 1.4.2003 and will be implemented in stages. Stage-I would be of one
year duration, from 1.4.2003 to 31.3.2004. Stage-II would be of two years duration, from
1.4.2004 to 31.3.2006. The modalities of Stage-III would be decided by the Department of
Fertilizers (DOF) after review of the implementation of Stage-I and Stage-II.
2. There will be six groups based on vintage and feedstock for determining the group
based concession under the new Scheme, namely, pre-1992 gas based units, post-1992 gas
based units, pre-1992 naphtha based units, post-1992 naphtha based units, fuel oil/low
sulphur heavy stock (FO/LSHS) based units and mixed energy based units. The mixed energy
based group shall include such gas-based units that use alternative feedstock/fuel to the
extent of more than 25% as admissible on 1.4.2002. Classification of units among different
groups so determined shall remain unchanged during Stages-I and II.
3. During Stage-I, following measures would be put into effect:
3.1. Rates of concession for the units in each group to be determined in two steps. In Step-I,
the weighted average retention price and the dealer‟s margin of the units in the respective
group as applicable on 1.4.2002 would be computed. Units having exceptionally high or low
retention price, i.e. deviation of 20% and above with reference to group average computed in
Step-I are to be treated as outliers in their respective groups. In Step-2, the final weighted
average group retention price after excluding the outliers will be computed.
3.2. The group concession rate on 1.4.2003 would be computed on the data of the units on
31.3.2003 as applicable. To determine that, the retention prices as notified for the half year up
to 30.9.2002 would be taken as the base and the adjustment on the basis of 8th pricing period
for the remaining period, i.e. 1.10.2002 to 31.3.2003, shall be made before the end of financial
year 2003-2004.
3.3. Effective 1.4.2003, the units in each group would receive the concession after adjustment
on account of escalation/de-escalation in the variable cost related to changes in the price of
feedstock, fuel, purchased power and water. The modalities for this purpose will be worked out
by DOF for Stage-I and Stage-II on the basis of group energy data and efficient consumption
patterns of the units keeping in view the data of 8th pricing period.
3.4. Those units which have lower retention price than the weighted group average (estimated
after excluding the outliers as final group retention price) are to get the concession as per their
individual retention price. The remaining units (excluding outliers) are to get the concession
based upon the weighted group average retention price computed after excluding the outliers.
This basis would be valid for Stage-II also.
3.5. After commencement of Stage-I and also beyond Stage-II, there shall neither be any
reimbursement of the investment made by a unit for improvement in operations nor any
mopping up of gains of the units as a result of operational efficiency. The parameters outlined
in the new scheme shall be the inputs for computation of concession.
3.6. The outliers having a retention price higher than 20% or more from the group average in
their respective group would be granted an adjustment phase of one year, i.e. Stage-I. During
Stage-I, such outliers will get a rate of concession based upon the group weighted average
(after excluding outliers) and a structural adjustment which will be 50% of the difference
between their respective retention price and the group average computed as Step-II mentioned
in para 3.1.
3.7. Group concession rates will be calculated excluding the incidence of sales tax on inputs
which will be computed and compensated on the basis of rates effective on 1.4.2002 for each
unit. However, the compensation would be proportionately reduced if the rates are reduced by
any State.
4. During Stage-II, i.e. from 1.4.2004, the following measures shall be put into effect :
4.1. There will be no special treatment for the outliers and all the units will get the group rate
of concession as outlined earlier for Stage-I. The units having lower concession rate than the
group average shall continue to get the concession as per their individual concession rate. The
six groups would remain as in Stage-I.
4.2. The concession rates shall be adjusted for reduction in capital related charges. Further,
the group energy norms would be enforced on efficiency considerations. The Department of
Fertilizers would take into consideration the recommendations of the Gokak Committee in
determining the group energy norms. The scale of reduction on account of capital related
charges (CRC) would also be finalized by the Department of Fertilizers. Thus, the adjustments
on account of CRC and group energy norms effective in Stage-II would be made known to the
units so that they have reasonable time for making necessary technological and other
structural adjustments.
5. Under the new Scheme, there will be no capping on production of urea. The use or sale
of by-products such as ammonia, CO2 etc. will be permitted in case considered surplus
beyond the reassessed capacity for urea production. The final concession would be
determined on the reassessed installed capacity. The additional production beyond the
installed capacity would receive concession if it is mopped up under the ECA allocation. The
feedstock/fuel ratio for the entire production would be taken into consideration for assessing
the concession.
6. Phased decontrol of urea distribution/movement
6.1. In Stage-I, i.e. from 1.4.2003 to 31.3.2004, the allocation of urea under the Essential
Commodities Act 1955 (ECA) will be restricted up to 75% and 50% of installed capacity (as
reassessed) of each unit in Kharif 2003 and Rabi 2003-04, respectively. The Department will
be free to make necessary adjustments in determining ECA allocation in case the
estimated/actual production during the year is below the reassessed installed capacity. The
remaining urea production will be available to the manufacturers for sale to the farmers at MRP
anywhere in the country. Manufacturers will be entitled to sell urea to complex manufacturing
units on the principle of import parity price or to export, with the condition that no
subsidy/concession will be payable on that quantity and it will be computed towards the
quantity permitted for decontrolled sale. The DOF will reserve the authority to make suitable
adjustments, in view of demand-supply positions in the ECA allocation, and de-controlled urea
up to 15% over and above the reassessed installed capacity in case their applicable
concession rate is financially and economically efficient thereby contributing to reduce the
subsidy burden. During Stage-II, urea distribution will be totally decontrolled after having
evaluated the Stage-I and with the concurrence of the Ministry of Agriculture.
7. Freight
7.1. During 2003-04, equated freight will be worked out for the urea quantity under ECA
allocation on the basis of average normative lead and rail-road mix of each unit for the last
three years i.e. 2000-01, 2001-02 and 2002-03. Suitable adjustments will be granted in the
event of rail freight revision during the course of 2003-04. Secondary freight will remain the
same as fixed for the 8th pricing period. For the quantity outside ECA allocation, a reduction of
Rs. 100 PMT will be made from the equated freight. The same levels of payment will be made
in Stage-II as well. Regarding the road component of the primary freight, appropriate
adjustments will be made as per annual increase/decrease in the Wholesale Price Index of
diesel in the previous year for the fuel part and indices of other components will remain
unchanged in the composite index.
7.2. The existing scheme for special freight subsidy will continue for supplies to the North
Eastern States and Jammu & Kashmir. The Government will also have the right to issue
special movement order under the EC Act as per the demand supply situation, particularly for
difficult and remote areas.
8. This Department has separately written to the Chief Executives of urea manufacturing
companies requesting them to convey their participation in the new pricing scheme by
executing an undertaking in the prescribed proforma.
Yours faithfully,
-sd (Sudhir Krishna)
Joint Secretary to the Government of India
Annexure-III
List of urea manufacturing units
S.NO. Name of the Group
Name of the units
I Pre-1992 Gas based units
1. BVFC-Namrup-III 2. IFFCO-Aonla-I 3. Indo-Gulf Jagdishpur 4. KRIBHCO-Hazira 5. NFL-Vijaipur-I 6. RCF-Trombay-V
II Post-1992 Gas based units
1. NFCL-Kakinada-I 2. CFCL-Gadepan-I 3. TCL-Babrala 4. OCFL-Shahjahanpur 5. NFCL-Kakinada-II 6. IFFCO-Aonla-II 7. NFL-Vijaipur-II
III Pre-1992 Naphtha based units
1. FACT-Cochin 2. Duncans, Kanpur 3. IFFCO-Phulpur-I 4. MCFL-Mangalore 5. MFL-Manali (Chennai) 6. SFC-Kota 7. SPIC-Tuticorin 8. ZIL-Goa
IV Post-1992 Naphtha based units
1. IFFCO-Phulpur-II 2. CFCL-Gadepan-II
V FO/LSHS based units
1. FCI-Sindri 2. GNFC-Bharuch 3. NLC-Neyveli 4. NFL-Nangal 5. NFL-Bhatinda 6. NFL-Panipat
VI Mixed energy based units
1. GSFC-Vadodara 2. IFFCO-Kalol 3. RCF-Thal
Annexure-IV
Group – I
Pre-92 Gas Based Plants
Group-I Pre-92 gas based plants
General Information
Name of the unit
Year of
commissioning
Yearly
reassessed
urea capacityFeed/Fuel used Sp energy consumption (Gcal/ MT urea)
(MT)Main
feedstock/fuelOther inputs Design Guaranteed
Actual (avg.
of 5 yrs)
Actual
(2001-02)
HFC, Namrup-III 1987 330000 NG None 7.615 7.967 17.291 22.753
KRIBHCO 1986 1729200 NG Naphtha 6.327 6.327 6.190 6.033
NFL, Vijapur-I 1988 864600 NG Naphtha, NGL NA NA 6.316 6.255
RCF, Trombay-V 1981 330000 AG FO, LSHS 7.950 NA 10.433 10.379
IFFCO, Aonla-I 1988 864600 NG Naphtha, FO NA 5.775 6.028 5.821
IGCFL, Jagdishpur 1988 864600 NGNaphtha, FO
& HSD6.273 6.323 5.859 5.683
Group-I Pre-92 gas based plants
Actual Urea Production
Name of the unit
Yearly
reassessed urea
capacityYear
(MT) 1997-98 1998-99 1999-2000 2000-2001 2001-2002
HFC, Namrup-III 330000Actual
Production (MT)197040 114760 122290 167100 64210
Capacity
Utilisation (%)59.71 34.78 37.06 50.64 19.46
KRIBHCO 1729200Actual
Production (MT)1771511 1516518 1557424 1630526 1694100
Capacity
Utilisation (%)102.45 87.70 90.07 94.29 97.97
NFL, Vijaipur-I 864600Actual
Production (MT)851416 854766 813148 810761 853411
Capacity
Utilisation (%)98.48 98.86 94.05 93.77 98.71
RCF, Trombay-V 330000Actual
Production (MT)317000 270200 302920 290765 39200
Capacity
Utilisation (%)96.06 81.88 91.79 88.11 11.88
IFFCO, Aonla-I 864600Actual
Production (MT)841186 851798 734527 814143 706076
Capacity
Utilisation (%)97.29 98.52 84.96 94.16 81.67
IGCFL, Jagdishpur 864600Actual
Production (MT)933779 1019975 1041967 879429 850145
Capacity
Utilisation (%)108.00 117.97 120.51 101.72 98.33
Group- I Pre-92 gas based plants
Sr. No Name of the unit % of NG used Yearly avg. urea Prodn. Specific energy consumption Gcal/ MT of Urea
MT (1997-98 to 2001-02) Feed Fuel Utilities Total
1 HFC, Namrup-III 99.50 133080 4.653 5.489 7.149 17.291
2 KRIBHCO 84.49 1634016 3.162 1.692 1.336 6.190
3 NFL, Vijapur-I 88.87 836700 3.519 0.916 1.881 6.316
4 RCF, Trombay-V 83.35 244017 3.688 5.737 1.008 10.433
5 IFFCO, Aonla-I 94.66 789546 3.193 1.375 1.459 6.028
6 IGCFL, Jagdishpur 85.11 945059 3.115 1.369 1.376 5.859
Weighted average 87.55 763736 3.294 1.755 1.616 6.665
Percentage of total energy, % 49.42 26.33 24.25 100.000
Specific energy consumption, Gcal/MT urea
17.291
6.190 6.316
10.433
6.028 5.8596.665
0
2
4
6
8
10
12
14
16
18
20
HFC, Namrup-III KRIBHCO NFL, Vijapur-I RCF, Trombay-V IFFCO, Aonla-I IGCFL,
Jagdishpur
Weighted average
Sp
ec
ific
en
erg
y, G
ca
l/M
T
Specific energy consumption, Gcal/MT urea
6.31
6
10.4
33
6.02
8
5.85
96.19
17.2
91
0
2
4
6
8
10
12
14
16
18
20
HFC, Namrup-III KRIBHCO NFL, Vijapur-I RCF, Trombay-V IFFCO, Aonla-I IGCFL, Jagdishpur
Sp
ec
ific
en
erg
y, G
ca
l/M
T
Avg. (6.665)
Avg. excl. outliers (6.110)
Outlier plant : HFC, Namrup-III and RCF, Trombay-V
Group- I Pre-92 gas based plants Specific Energy Consumption, Gcal/ MT of Urea
Sr. No Name of the unit Year wise specific energy consumption Gcal/ MT of Urea % deviation
1997-98 1998-99 1999-00 2000-01 2001-02 Wt. Average from wt. average
1 HFC, Namrup-III 14.825 19.551 17.848 16.140 22.753 17.291 159.430
2 KRIBHCO 6.201 6.362 6.301 6.077 6.033 6.190 -7.127
3 NFL, Vijapur-I 6.449 6.312 6.264 6.298 6.255 6.316 -5.236
4 RCF, Trombay-V 10.700 11.093 10.357 9.614 10.379 10.433 56.534
5 IFFCO, Aonla-I 6.101 6.107 6.096 5.986 5.821 6.028 -9.557
6 IGCFL, Jagdishpur 5.956 5.825 5.887 5.934 5.683 5.859 -12.093
Weighted average 6.817 6.791 6.745 6.663 6.267 6.665 0.000
Wt. avg. excluding Outliers 6.178 6.172 6.153 6.072 5.970 6.110
Group-I 5 years average 3 years average Last year (01-02) average
Specific energy consumption Complete group Excluding Outliers Complete group Excluding Outliers Complete group Excluding Outliers
Gcal/MT urea 6.665 6.110 6.566 6.066 6.267 5.970
Outliers plants in a group :
Plants having deviation beyond (+/-) 20 % on weighted average specific energy consumption have been considered as outliers.
All the plants of the group including outliers have been considered while calculating above weighted average specific energy consumption.
Group- I Pre-92 gas based plants
Specific Energy Consumption, Gcal/ MT of Urea
Group- I Pre-92 gas based plants
Specific Energy Consumption, Gcal/ MT of Urea
Specific energy consumption, Gcal/MT urea
14.8
25
19.5
51
17.8
48
16.1
40
22.7
53
14
15
16
17
18
19
20
21
22
23
1997-98 1998-99 1999-00 2000-01 2001-02
Gcal/M
T u
rea
HFC, Namrup (17.291)
Specific energy consumption, Gcal/MT urea
6.20
1
6.36
2
6.30
1
6.07
7
6.03
3
6
6.175
6.35
1997-98 1998-99 1999-00 2000-01 2001-02
Gca
l/M
T u
rea
KRIBHCO (6.190)
Specific energy consumption, Gcal/MT urea
6.44
9
6.31
2
6.26
4 6.29
8
6.25
5
6
6.175
6.35
1997-98 1998-99 1999-00 2000-01 2001-02
Gca
l/M
T u
rea
NFL, Vij-I (6.316)
Specific energy consumption, Gcal/MT urea
10.7
0011
.093
10.3
57
9.61
4
10.3
79
9
9.5
10
10.5
11
11.5
12
1997-98 1998-99 1999-00 2000-01 2001-02
Gca
l/M
T u
rea
RCF, T-V (10.433)
Specific energy consumption, Gcal/MT urea
6.10
1
6.10
7
6.09
6
5.98
6
5.82
1
5.5
6
6.5
1997-98 1998-99 1999-00 2000-01 2001-02
Gca
l/M
T u
rea
IFFCO, A-I (6.028)
Specific energy consumption, Gcal/MT urea
5.95
6
5.82
5 5.88
7 5.93
4
5.68
3
5.5
6
6.5
1997-98 1998-99 1999-00 2000-01 2001-02
Gca
l/M
T u
rea
IGFCL (5.859)
Specific energy consumption, Gcal/MT urea
6.81
7
6.79
1
6.74
5
6.66
3
6.26
7
6
6.5
7
1997-98 1998-99 1999-00 2000-01 2001-02
Gca
l/M
T u
rea
Wt. Avg. of the group (6.665)
Specific energy consumption, Gcal/MT urea
6.17
8
6.17
2
6.15
3
6.07
2
5.97
0
5.5
6
6.5
1997-98 1998-99 1999-00 2000-01 2001-02
Gca
l/M
T u
rea
Wt. Avg. of the group excl. outliers (6.110)
Group- I Pre-92 gas based plants Summary (% Mix and Energy)
Sr. No Description % Raw Material Mix Sp. energy
NG/AG, % Naphtha, % FO, % LSHS, % Ex. Ammonia, % HSD, % NGL, % Power, % Total, % Gcal/ MT urea
5 years average
Case-I Complete group 87.98 8.42 1.60 0.54 0.03 0.01 0.52 0.90 100.00 6.665
Case-II Excluding Outliers 87.41 10.01 1.85 0.00 0.03 0.01 0.62 0.07 100.00 6.110
Last 3 years average
Case-III Complete group 89.43 8.02 1.06 0.58 0.07 0.00 0.00 0.84 100.00 6.566
Case-IV Excluding Outliers 89.31 9.38 1.18 0.00 0.08 0.00 0.00 0.05 100.00 6.066
Last year (01-02) average
Case-V Complete group 91.85 7.73 0.01 0.00 0.05 0.00 0.00 0.37 100.00 6.267
Case-VI Excluding Outliers 91.55 8.32 0.01 0.00 0.06 0.00 0.00 0.07 100.00 5.970
Group- I Pre-92 gas based plants Unitwise % Raw Material Mix
Weighted Average for 5 years
Sr. No Name of the unit NG/AG, % Naphtha, % FO, % LSHS, % Ex. Ammonia, % HSD, % NGL, % Power, % Total, %
1 HFC, Namrup-III 99.50 0.00 0.00 0.00 0.00 0.00 0.00 0.50 100.00
2 KRIBHCO 84.49 15.40 0.00 0.00 0.00 0.00 0.00 0.11 100.00
3 NFL, Vijapur-I 88.87 8.10 0.00 0.00 0.00 0.00 3.01 0.02 100.00
4 RCF, Trombay-V 83.35 0.00 0.55 6.44 0.00 0.00 0.00 9.66 100.00
5 IFFCO, Aonla-I 94.66 2.75 2.23 0.00 0.00 0.00 0.00 0.36 100.00
6 IGCFL, Jagdishpur 85.11 8.24 6.68 0.00 0.14 0.04 0.00 -0.21 100.00
Case-I Weighted average 87.98 8.42 1.60 0.54 0.03 0.01 0.52 0.90 100.00
Case-II Wt. avg. excluding Outliers 87.41 10.01 1.85 0.00 0.03 0.01 0.62 0.07 100.00
Weighted average for three years
Sr. No Name of the unit NG/AG, % Naphtha, % FO, % LSHS, % Ex. Ammonia, % HSD, % NGL, % Power, % Total, %
1 HFC, Namrup-III 99.43 0.00 0.00 0.00 0.00 0.00 0.00 0.57 100.00
2 KRIBHCO 84.48 15.43 0.00 0.00 0.00 0.00 0.00 0.08 100.00
3 NFL, Vijapur-I 92.47 7.53 0.00 0.00 0.00 0.00 0.00 0.00 100.00
4 RCF, Trombay-V 80.05 0.00 0.70 8.06 0.00 0.00 0.00 10.39 99.20
5 IFFCO, Aonla-I 98.56 0.43 0.72 0.00 0.00 0.00 0.00 0.29 100.00
6 IGCFL, Jagdishpur 87.52 7.39 4.88 0.00 0.37 0.00 0.00 -0.15 100.00
Case-III Weighted average 89.43 8.02 1.06 0.58 0.07 0.00 0.00 0.84 100.00
Case-IV Wt. avg. excluding Outliers 89.31 9.38 1.18 0.00 0.08 0.00 0.00 0.05 100.00
Latest year (2001-02)
Sr. No Name of the unit NG/AG, % Naphtha, % FO, % LSHS, % Ex. Ammonia, % HSD, % NGL, % Power, % Total, %
1 HFC, Namrup-III 99.04 0.00 0.00 0.00 0.00 0.00 0.00 0.96 100.00
2 KRIBHCO 83.01 16.91 0.00 0.00 0.00 0.00 0.00 0.08 100.00
3 NFL, Vijapur-I 100.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 100.00
4 RCF, Trombay-V 83.94 0.00 0.00 0.00 0.00 0.00 0.00 16.06 100.00
5 IFFCO, Aonla-I 99.00 0.73 0.05 0.00 0.00 0.00 0.00 0.22 100.00
6 IGCFL, Jagdishpur 93.94 5.78 0.00 0.00 0.29 0.00 0.00 0.00 100.00
Case-V Weighted average 91.85 7.73 0.01 0.00 0.05 0.00 0.00 0.37 100.00
Case-VI Wt. avg. excluding Outliers 91.55 8.32 0.01 0.00 0.06 0.00 0.00 0.07 100.00
Summary of the raw material percentage mix
Sr. No Name of the unit NG/AG, % Naphtha, % FO, % LSHS, % Ex. Ammonia, % HSD, % NGL, % Power, % Total, %
5 years average
Case-I Complete group 87.98 8.42 1.60 0.54 0.03 0.01 0.52 0.90 100.00
Case-II Excluding Outliers 87.41 10.01 1.85 0.00 0.03 0.01 0.62 0.07 100.00
Last 3 years average
Case-III Complete group 89.43 8.02 1.06 0.58 0.07 0.00 0.00 0.84 100.00
Case-IV Excluding Outliers 89.31 9.38 1.18 0.00 0.08 0.00 0.00 0.05 100.00
Last year (01-02) average
Case-V Complete group 91.85 7.73 0.01 0.00 0.05 0.00 0.00 0.37 100.00
Case-VI Excluding Outliers 91.55 8.32 0.01 0.00 0.06 0.00 0.00 0.07 100.00
Annexure-V
Group – II
Post-92 Gas Based Plants
Group-II Post-92 gas based plants
General Information
Name of the unit
Year of
commissioning
Yearly
reassessed
urea capacityFeed/Fuel used Sp energy consumption (Gcal/ MT urea)
(MT)Main
feedstock/fuelOther inputs Design Guaranteed
Actual (avg.
of 5 yrs)
Actual
(2001-02)
CFCL-I 1994 864600 NG Naphtha 5.914 NA 5.934 5.768
NFCL-I 1992 597300 NG LSHS NA NA 5.868 5.997
NFL, Vijapur-II 1997 864600 NG, Naphtha NGL NA NA 5.836 5.713
OCFL, Shahjahanpur 1995 864600 NG Naphtha 5.885 5.885 6.008 5.859
Tata, Babrala 1994 864600 NG, Naphtha None NA 5.786 5.546 5.382
IFFCO Aonla-II 1996 864600 NG, Naphtha FO NA 5.591 5.697 5.547
NFCL-II NA 597300 NG, Naphtha None NA NA 6.300 6.034
Group-II Post-92 gas based plants
Actual Urea Production
Name of the unit
Yearly
reassessed urea
capacityYear
(MT) 1997-98 1998-99 1999-2000 2000-2001 2001-2002
CFCL-I 864600Actual
Production (MT)969621 956844 946277 888954 857711
Capacity
Utilisation (%)112.15 110.67 109.45 102.82 99.20
NFCL-I 597300Actual
Production (MT)678617 688870 641378 676484 611329
Capacity
Utilisation (%)113.61 115.33 107.38 113.26 102.35
NFL, Vijapur-II 864600Actual
Production (MT)810268 861856 903154 853405 853412
Capacity
Utilisation (%)93.72 99.68 104.46 98.71 98.71
OCFL, Shahjahanpur 864600Actual
Production (MT)930046 890694 871642 837004 840629
Capacity
Utilisation (%)107.57 103.02 100.81 96.81 97.23
Tata, Babrala 864600Actual
Production (MT)1021001 878457 982268 892647 853547
Capacity
Utilisation (%)118.09 101.60 113.61 103.24 98.72
IFFCO Aonla-II 864600Actual
Production (MT)830897 839426 844126 857982 864356
Capacity
Utilisation (%)96.10 97.09 97.63 99.23 99.97
NFCL-II 597300Actual
Production (MT)523737 656132 688310 610615
Capacity
Utilisation (%)
Commissioning
year109.85 115.24 102.23
Group- II Post-92 gas based plants
Sr. No Name of the unit % of NG used Yearly avg. urea Prodn. Specific energy consumption Gcal/ MT of Urea
MT (1997-98 to 2001-02) Feed Fuel Utilities Total
1 CFCL-I 84.55 923881 3.184 1.287 1.463 5.934
2 NFCL-I 99.92 659336 3.279 1.129 1.459 5.868
3 NFL, Vijapur-II 90.70 856419 3.508 1.535 0.792 5.836
4 OCFL 91.99 874003 3.285 1.256 1.467 6.008
5 Tata 88.27 925584 3.184 1.079 1.283 5.546
6 IFFCO, Aonla-II 88.78 847357 3.194 1.974 0.530 5.697
7 NFCL-II 53.36 619699 3.434 1.243 1.644 6.321
Weighted average 86.23 815183 3.284 1.367 1.205 5.857
Percentage of total energy, % 56.08 23.35 20.57 100.000
Outlier plant : None
Specific energy consumption, Gcal/MT urea
5.934 5.868 5.8366.008
5.546 5.697
6.321
5.857
-0.2
0.8
1.8
2.8
3.8
4.8
5.8
6.8
CFCL-I NFCL-I NFL, Vijapur-II OCFL Tata IFFCO, Aonla-II NFCL-II Weighted average
Sp
ec
ific
en
erg
y,
Gc
al/
MT
Specific energy consumption, Gcal/MT urea
5.93
4
5.86
8
5.83
66.
008
5.54
65.
697
6.32
1
Average of the group
(5.857)
5
5.2
5.4
5.6
5.8
6
6.2
6.4
CFCL-I NFCL-I NFL, Vijapur-II OCFL Tata IFFCO, Aonla-II NFCL-II
Sp
ec
ific
en
erg
y,
Gc
al/
MT
Group- II Post-92 gas based plants Specific Energy Consumption, Gcal/ MT of Urea
Sr. No Name of the unit Year wise specific energy consumption Gcal/ MT of Urea % deviation
1997-98 1998-99 1999-00 2000-01 2001-02 Wt. Average from wt. average
1 CFCL-I 6.032 6.016 6.010 5.821 5.768 5.934 1.315
2 NFCL-I 5.825 5.871 5.910 5.753 5.997 5.868 0.188
3 NFL, Vijapur-II 6.026 5.903 5.784 5.765 5.713 5.836 -0.359
4 OCFL 5.847 6.273 6.064 5.994 5.859 6.008 2.578
5 TATA 5.560 5.693 5.565 5.520 5.382 5.546 -5.310
6 IFFCO, Aonla-II 5.908 5.751 5.665 5.623 5.547 5.697 -2.732
7 NFCL-II 7.184 6.216 6.022 6.034 6.321 7.922
Weighted average 5.860 6.040 5.871 5.777 5.734 5.857 0.000
Wt. avg. excluding Outliers 5.860 6.040 5.871 5.777 5.734 5.857
Group-I 5 years average 3 years average Last year (01-02) average
Specific energy consumption Complete group Excluding Outliers Complete group Excluding Outliers Complete group Excluding Outliers
Gcal/MT urea 5.857 5.857 5.796 5.796 5.734 5.734
Outliers plants in a group :
Plants having deviation beyond (+/-) 20 % on weighted average specific energy consumption have been considered as outliers.
All the plants of the group including outliers have been considered while calculating above weighted average specific energy consumption.
Group- II Post-92 gas based plants
Specific Energy Consumption, Gcal/ MT of Urea
Group- II Post-92 gas based plants
Specific Energy Consumption, Gcal/ MT of Urea
Specific energy consumption, Gcal/MT urea
6.03
2
6.01
6
6.01
0
5.82
1
5.76
8
5.5
6
6.5
1997-98 1998-99 1999-00 2000-01 2001-02
Gca
l/M
T u
rea
CFCL-I (5.934)
Specific energy consumption, Gcal/MT urea
5.825 5.871 5.9105.753
5.997
5.5
6
6.5
1997-98 1998-99 1999-00 2000-01 2001-02
Gca
l/M
T u
rea
NFCL-I (5.868)
Specific energy consumption, Gcal/MT urea
6.0265.903
5.784 5.765 5.713
5.5
6
6.5
1997-98 1998-99 1999-00 2000-01 2001-02
Gca
l/M
T u
rea
NFL, Vij-II (5.836)
Specific energy consumption, Gcal/MT urea
5.847
6.273
6.0645.994
5.859
5.5
6
6.5
1997-98 1998-99 1999-00 2000-01 2001-02
Gca
l/M
T u
rea
OCFL (6.008)
Specific energy consumption, Gcal/MT urea
5.3825.5205.5655.560 5.693
5
5.5
6
6.5
1997-98 1998-99 1999-00 2000-01 2001-02
Gca
l/M
T u
rea
TATA (5.546)
Specific energy consumption, Gcal/MT urea
5.9085.751 5.665 5.623 5.547
5
5.5
6
6.5
1997-98 1998-99 1999-00 2000-01 2001-02
Gca
l/M
T u
rea
IFFCO, Aonla-II (5.697)
Specific energy consumption, Gcal/MT urea
5.8606.040
5.8715.777 5.734
5
5.5
6
6.5
1997-98 1998-99 1999-00 2000-01 2001-02
Gca
l/M
T u
rea
Wt. Avg. of the group (5.812)
Specific energy consumption, Gcal/MT urea
5.8606.040
5.8715.777 5.734
5
5.5
6
6.5
1997-98 1998-99 1999-00 2000-01 2001-02
Gca
l/M
T u
rea
Wt. Avg. of the group excluding
outliers (5.812)
Group- II Post-92 gas based plants Summary
Sr. No Name of the unit % Raw Material Mix Sp. energy
NG, % AG, % Naphtha, % FO, % LSHS, % Ex. Ammonia, % HSD, % NGL, % Power, % Total, % Gcal/ MT urea
5 years average
Case-I Complete group 85.94 0.00 13.87 0.02 0.00 0.00 0.00 0.10 0.08 100.0 5.857
Case-II Excluding Outliers 85.94 0.00 13.87 0.02 0.00 0.00 0.00 0.10 0.08 100.0 5.857
3 years average
Case-III Complete group 89.71 0.00 10.23 -0.02 0.00 0.00 0.00 0.00 0.07 100.0 5.796
Case-IV Excluding Outliers 89.71 0.00 10.23 -0.02 0.00 0.00 0.00 0.00 0.07 100.0 5.796
Last year (01-02) average
Case-V Complete group 93.44 0.00 6.48 0.00 0.00 0.00 0.00 0.00 0.08 100.0 5.734
Case-VI Excluding Outliers 93.44 0.00 6.48 0.00 0.00 0.00 0.00 0.00 0.08 100.0 5.734
Group- II Post-92 gas based plants Raw material percentage (%) mix based on energy consumption
Weighted Average for 5 years
Sr. No Name of the unit NG, % AG, % Naphtha, % FO, % LSHS, % Ex. Ammonia, % HSD, % NGL, % Power, % Total, %
1 CFCL-I 84.55 0.00 15.18 0.00 0.00 0.00 0.00 0.00 0.27 100.00
2 NFCL-I 99.92 0.00 0.00 0.00 0.01 0.00 0.00 0.00 0.07 100.00
3 NFL, Vijapur-II 90.70 0.00 8.64 0.00 0.00 0.00 0.00 0.64 0.02 100.00
4 OCFL 91.99 0.00 8.01 0.00 0.00 0.00 0.00 0.00 0.00 100.00
5 TATA 88.27 0.00 11.73 0.00 0.00 0.00 0.00 0.00 0.00 100.00
6 IFFCO, Aonla-II 88.78 0.00 11.04 0.12 0.00 0.00 0.00 0.00 0.06 100.00
7 NFCL-II 53.31 0.00 46.59 0.00 0.00 0.00 0.00 0.00 0.10 100.00
Case-I Weighted average 85.92 0.00 13.89 0.02 0.00 0.00 0.00 0.10 0.08 100.00
Case-II Wt. avg. excluding Outliers 85.92 0.00 13.89 0.02 0.00 0.00 0.00 0.10 0.08 100.00
Weighted Average for 3 years
Sr. No Name of the unit NG, % AG, % Naphtha, % FO, % LSHS, % Ex. Ammonia, % HSD, % NGL, % Power, % Total, %
1 CFCL-I 87.63 0.00 12.14 0.00 0.00 0.00 0.00 0.00 0.23 100.00
2 NFCL-I 99.88 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.10 100.00
3 NFL, Vijapur-II 95.38 0.00 4.62 0.00 0.00 0.00 0.00 0.00 0.00 100.00
4 OCFL 95.36 0.00 4.64 0.00 0.00 0.00 0.00 0.00 0.00 100.00
5 TATA 93.29 0.00 6.71 0.00 0.00 0.00 0.00 0.00 0.00 100.00
6 IFFCO, Aonla-II 93.25 0.00 6.77 -0.11 0.00 0.00 0.00 0.00 0.08 100.00
7 NFCL-II 59.77 0.00 40.13 0.00 0.00 0.00 0.00 0.00 0.09 100.00
Case-III Weighted average 89.71 0.00 10.23 -0.02 0.00 0.00 0.00 0.00 0.07 100.00
Case-IV Wt. avg. excluding Outliers 89.71 0.00 10.23 -0.02 0.00 0.00 0.00 0.00 0.07 100.00
Latest year (2001-02)
Sr. No Name of the unit NG, % AG, % Naphtha, % FO, % LSHS, % Ex. Ammonia, % HSD, % NGL, % Power, % Total, %
1 CFCL-I 89.67 0.00 10.13 0.00 0.00 0.00 0.00 0.00 0.20 100.00
2 NFCL-I 99.89 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.11 100.00
3 NFL, Vijapur-II 100.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 100.00
4 OCFL 97.30 0.00 2.70 0.00 0.00 0.00 0.00 0.00 0.00 100.00
5 TATA 99.24 0.00 0.76 0.00 0.00 0.00 0.00 0.00 0.00 100.00
6 IFFCO, Aonla-II 88.55 0.00 11.30 -0.01 0.00 0.00 0.00 0.00 0.16 100.00
7 NFCL-II 77.40 0.00 22.49 0.00 0.00 0.00 0.00 0.00 0.11 100.00
Case-V Weighted average 93.44 0.00 6.48 0.00 0.00 0.00 0.00 0.00 0.08 100.00
Case-VI Wt. avg. excluding Outliers 93.44 0.00 6.48 0.00 0.00 0.00 0.00 0.00 0.08 100.00
Summary of the raw material percentage mix
Sr. No Name of the unit NG, % AG, % Naphtha, % FO, % LSHS, % Ex. Ammonia, % HSD, % NGL, % Power, % Total, %
5 years average
Case-I Complete group 85.92 0.00 13.89 0.02 0.00 0.00 0.00 0.10 0.08 100.00
Case-II Excluding Outliers 85.92 0.00 13.89 0.02 0.00 0.00 0.00 0.10 0.08 100.00
3 years average
Case-III Complete group 89.71 0.00 10.23 -0.02 0.00 0.00 0.00 0.00 0.07 100.0
Case-IV Excluding Outliers 89.71 0.00 10.23 -0.02 0.00 0.00 0.00 0.00 0.07 100.0
Last year (01-02) average
Case-V Complete group 93.44 0.00 6.48 0.00 0.00 0.00 0.00 0.00 0.08 100.0
Case-VI Excluding Outliers 93.44 0.00 6.48 0.00 0.00 0.00 0.00 0.00 0.08 100.0
Annexure-VI
Group – III-A
Pre-92 Naphtha Based Plants
Group-III A Pre-92 Naphtha based plants
General Information
Name of the unit
Year of
commissioning
Yearly
reassessed
urea capacityFeed/Fuel used Sp energy consumption (Gcal/ MT urea)
(MT)Main
feedstock/fuel
Other
inputsDesign Guaranteed
Actual (avg.
of 5 yrs)
Actual
(2001-02)
SFC Kota 1969 379000 NaphthaFO, Coal,
HSDNA NA 8.217 8.090
Duncans 1970/1981 722000 Naphtha Coal NA NA 7.944 7.909
MFL 1997 486750 NaphthaFO, LSHS,
HSD7.320 7.250 8.967 8.979
FACT 1973 330000 Naphtha FO, LSHS 8.381 NA 11.320 15.590
ZACL 1973 399300 Naphtha FO 8.350 NA 7.542 7.332
SPIC 1975 620400 NaphthaFO, LSHS,
HSD7.600 7.600 7.481 7.293
MCFL 1976 340000 Naphtha FO 7.350 7.880 7.480 7.323
IFFCO Phulpur-I 1980 551100 NaphthaFO, LSHS,
HSD, COAL NA 7.400 8.140 7.689
Group-III A Pre-92 Naphtha based plants
Actual Urea Production
Name of the unit
Yearly
reassessed urea
capacityYear
(MT) 1997-98 1998-99 1999-2000 2000-2001 2001-2002
SFC Kota 379000Actual
Production (MT)392653 393087 404535 324735 330200
Capacity
Utilisation (%)103.60 103.72 106.74 85.68 87.12
Duncans 722000Actual
Production (MT)733720 732936 694891 673319 658700
Capacity
Utilisation (%)101.62 101.51 96.25 93.26 91.23
MFL 486750Actual
Production (MT)63711 327982 403760 401570 286891
Capacity
Utilisation (%)
Commissionin
g year67.38 82.95 82.50 58.94
FACT 330000Actual
Production (MT)274200 183065 265298 275170 22280
Capacity
Utilisation (%)83.09 55.47 80.39 83.38 6.75
ZACL 399300Actual
Production (MT)477800 336615 430071 394145 419417
Capacity
Utilisation (%)119.66 84.30 107.71 98.71 105.04
SPIC 620400Actual
Production (MT)618280 591151 681769 627711 600110
Capacity
Utilisation (%)99.66 95.29 109.89 101.18 96.73
MCFL 340000Actual
Production (MT)274509 356797 288102 340050 340002
Capacity
Utilisation (%)80.74 104.94 84.74 100.01 100.00
IFFCO Phulpur-I 551100Actual
Production (MT)565029 570275 507949 520001 512000
Capacity
Utilisation (%)102.53 103.48 92.17 94.36 92.91
Group- III-A Pre-92 Naphtha based plants
Sr. No Name of the unit % of Naphtha used Yearly avg. urea Prodn. Specific energy consumption Gcal/ MT of Urea
MT (1997-98 to 2001-02) Feed Fuel Utilities Total
1 SFC, Kota 58.01 369042 4.767 0.000 3.450 8.217
2 Duncans 60.25 698713 3.236 1.551 3.158 7.944
3 MFL 57.71 296783 4.006 1.168 3.792 8.967
4 FACT 48.39 204003 5.096 5.548 0.676 11.320
5 ZACL 69.44 411610 3.173 2.065 2.305 7.542
6 SPIC 60.32 623804 3.270 3.592 0.619 7.481
7 MCFL 67.39 319892 3.224 1.817 2.439 7.480
8 IFFCO, Ph-I 63.01 535051 3.389 1.792 2.959 8.140
Weighted average 61.29 432362 3.596 2.080 2.441 8.116
Percentage of total energy, % 44.31 25.62 30.07 100.00
Outlier plant : FACT, Cochin
Specific energy consumption, Gcal/MT urea
8.2177.944
8.967
11.320
7.542 7.481 7.480
8.140 8.116
0
2
4
6
8
10
12
SFC, Kota Duncans MFL FACT ZACL SPIC MCFL IFFCO, Ph-I Weighted
average
Sp
ec
ific
en
erg
y,
Gc
al/
MT
Specific energy consumption, Gcal/MT urea
8.21
7
7.94
4
8.96
7
11.3
20
7.54
2
7.48
1
7.48
08.
140
Avg. (8.116)
Avg. excl. outliers
(7.915)
5.0
6.0
7.0
8.0
9.0
10.0
11.0
12.0
SFC, Kota Duncans MFL FACT ZACL SPIC MCFL IFFCO, Ph-I
Sp
ec
ific
en
erg
y,
Gc
al/
MT
Group- III-A Pre-92 Naphtha based plants Specific Energy Consumption, Gcal/ MT of Urea
Sr. No Name of the unit Year wise specific energy consumption Gcal/ MT of Urea % deviation
1997-98 1998-99 1999-00 2000-01 2001-02 Wt. Average from wt. average
1 SFC, Kota 8.429 8.188 8.154 8.205 8.090 8.217 1.244
2 Duncans 8.039 8.125 7.794 7.833 7.909 7.944 -2.119
3 MFL 13.748 9.541 8.357 8.343 8.979 8.967 10.485
4 FACT 10.595 12.459 11.507 10.757 15.590 11.320 39.478
5 ZACL 7.627 7.899 7.573 7.325 7.332 7.542 -7.072
6 SPIC 7.739 7.625 7.477 7.275 7.293 7.481 -7.824
7 MCFL 7.674 7.540 7.565 7.347 7.323 7.480 -7.836
8 IFFCO, Ph-I 8.699 8.126 8.014 8.115 7.689 8.140 0.296
Weighted average 8.365 8.326 8.091 7.991 7.787 8.116 0.000
Wt. avg. excluding Outliers 8.169 8.098 7.826 7.759 7.732 7.915
Group-I 5 years average 3 years average Last year (01-02) average
Specific energy consumption Complete group Excluding Outliers Complete group Excluding Outliers Complete group Excluding Outliers
Gcal/MT urea 8.116 7.915 7.964 7.773 7.787 7.732
Outliers plants in a group :
Plants having deviation beyond (+/-) 20 % on weighted average specific energy consumption have been considered as outliers.
All the plants of the group including outliers have been considered while calculating above weighted average specific energy consumption.
Group- III-A Pre-92 Naphtha based plants
Specific Energy Consumption, Gcal/ MT of Urea
Group- III-A Pre-92 Naphtha based plants
Specific Energy Consumption, Gcal/ MT of Urea
Group- III-A Pre-92 Naphtha based plants
Specific Energy Consumption, Gcal/ MT of Urea
Specific energy consumption, Gcal/MT urea
8.42
9
8.18
8
8.15
48.
205
8.09
0
7.5
8
8.5
9
1997-98 1998-99 1999-00 2000-01 2001-02
Gca
l/M
T u
rea
SFC, Kota (8.217)
Specific energy consumption, Gcal/MT urea
8.03
9 8.12
5
7.79
47.
833 7.
909
7.5
7.675
7.85
8.025
8.2
8.375
1997-98 1998-99 1999-00 2000-01 2001-02
Gca
l/M
T u
rea
Duncans (7.944)
Specific energy consumption, Gcal/MT urea
13.748
9.541
8.357 8.343
8.979
8
9
10
11
12
13
14
1997-98 1998-99 1999-00 2000-01 2001-02
Gca
l/M
T u
rea
MFL (8.967)
Specific energy consumption, Gcal/MT urea
7.627
7.899
7.332
7.573
7.325
7
7.5
8
8.5
1997-98 1998-99 1999-00 2000-01 2001-02
Gca
l/M
T u
rea
ZACL (7.542)
Specific energy consumption, Gcal/MT urea
7.739
7.625
7.477
7.2937.275
7
7.5
8
1997-98 1998-99 1999-00 2000-01 2001-02
Gca
l/M
T u
rea
SPIC (7.481)
Specific energy consumption, Gcal/MT urea
8.1698.098
7.8267.759 7.732
7
7.5
8
8.5
1997-98 1998-99 1999-00 2000-01 2001-02
Gca
l/M
T u
rea
Wt. Avg. of the group excl. outliers (7.915)
Specific energy consumption, Gcal/MT urea
10.5
95
12.4
59
11.5
07
10.7
57
15.5
90
8
9
10
11
12
13
14
15
16
1997-98 1998-99 1999-00 2000-01 2001-02
Gca
l/M
T u
rea
FACT (11.320)
Specific energy consumption, Gcal/MT urea
7.674
7.540 7.565
7.347 7.323
7.00
7.50
8.00
1997-98 1998-99 1999-00 2000-01 2001-02
Gca
l/M
T u
rea
MCFL (7.480)
Specific energy consumption, Gcal/MT urea
8.699
8.1268.014
8.115
7.689
7.5
8
8.5
9
1997-98 1998-99 1999-00 2000-01 2001-02
Gca
l/M
T u
rea
IFFCO, Ph-I (8.140)
Specific energy consumption, Gcal/MT urea
8.365 8.326
8.0917.991
7.787
7
7.5
8
8.5
1997-98 1998-99 1999-00 2000-01 2001-02
Gca
l/M
T u
rea
Avg. of group (8.116)
Group- III-A Pre-92 Naphtha based plants Summary
Sr. No Name of the unit % Raw Material Mix Sp. energy
NG, % AG, % Naphtha, % FO, % LSHS, % Ex. Ammonia, % HSD, % NGL, % Coal, % Power, % Total, % Gcal/ MT urea
5 years average
Case-I Complete group 0.00 0.00 60.86 15.85 3.25 1.26 0.17 0.00 11.85 6.76 100.00 8.116
Case-II Excluding Outliers 0.00 0.00 61.97 16.53 1.03 0.54 0.18 0.00 12.91 6.83 100.00 7.915
3 years average
Case-III Complete group 0.00 0.00 61.23 16.11 3.00 1.35 0.24 0.00 11.45 6.62 100.00 7.964
Case-IV Excluding Outliers 0.00 0.00 62.52 16.70 1.07 0.40 0.26 0.00 12.40 6.66 100.00 7.773
Last year (01-02) average
Case-III Complete group 0.00 0.00 62.09 16.98 1.38 0.49 0.10 0.00 12.43 6.53 100.00 7.787
Case-IV Excluding Outliers 0.00 0.00 62.36 16.92 1.20 0.31 0.10 0.00 12.61 6.50 100.00 7.732
Group- III-A Pre-92 Naphtha based plants Unitwise % Raw material mix
Weighted Average for 5 years
Sr. No Name of the unit NG, % AG, % Naphtha, % FO, % LSHS, % Ex. Ammonia, % HSD, % Coal, % NGL, % Power, % Total, %
1 SFC, Kota 0.00 0.00 58.01 0.61 0.00 0.00 0.01 37.17 0.00 4.20 100.00
2 Duncans 0.00 0.00 60.25 0.00 0.00 0.00 0.00 16.62 0.00 23.13 100.00
3 MFL 0.00 0.00 57.71 32.94 0.01 0.00 1.52 0.00 0.00 7.82 100.00
4 FACT 0.00 0.00 48.39 8.24 28.06 9.34 0.00 0.00 0.00 5.97 100.00
5 ZACL 0.00 0.00 69.44 30.24 0.00 0.00 0.00 0.00 0.00 0.32 100.00
6 SPIC 0.00 0.00 60.32 34.89 0.11 2.38 0.01 0.00 0.00 2.29 100.00
7 MCFL 0.00 0.00 67.39 32.48 0.00 0.00 0.00 0.00 0.00 0.13 100.00
8 IFFCO, Ph-I 0.00 0.00 63.01 0.45 5.96 0.64 0.14 29.32 0.00 0.48 100.00
Case-I Weighted average 0.00 0.00 60.86 15.85 3.25 1.26 0.17 11.85 0.00 6.76 100.00
Case-II Wt. avg. excluding Outliers 0.00 0.00 61.97 16.53 1.03 0.54 0.18 12.91 0.00 6.83 100.00
Weighted Average for 3 years
Sr. No Name of the unit NG, % AG, % Naphtha, % FO, % LSHS, % Ex. Ammonia, % HSD, % Coal, % NGL, % Power, % Total, %
1 SFC, Kota 0.00 0.00 57.99 0.55 0.00 0.00 0.01 37.31 0.00 4.14 100.00
2 Duncans 0.00 0.00 60.46 0.00 0.00 0.00 0.00 16.95 0.00 22.60 100.00
3 MFL 0.00 0.00 58.61 31.87 0.01 0.00 1.99 0.00 0.00 7.53 100.00
4 FACT 0.00 0.00 45.78 9.06 26.18 12.74 0.00 0.00 0.00 6.23 100.00
5 ZACL 0.00 0.00 70.04 29.71 0.00 0.00 0.00 0.00 0.00 0.26 100.00
6 SPIC 0.00 0.00 61.74 33.52 0.09 1.97 0.01 0.00 0.00 2.67 100.00
7 MCFL 0.00 0.00 67.79 32.21 0.00 0.00 0.00 0.00 0.00 0.00 100.00
8 IFFCO, Ph-I 0.00 0.00 63.48 0.04 6.58 0.25 0.12 29.20 0.00 0.34 100.00
Case-III Weighted average 0.00 0.00 61.23 16.11 3.00 1.35 0.24 11.45 0.00 6.62 100.00
Case-IV Wt. avg. excluding Outliers 0.00 0.00 62.52 16.70 1.07 0.40 0.26 12.40 0.00 6.66 100.00
Latest year (2001-02)
Sr. No Name of the unit NG, % AG, % Naphtha, % FO, % LSHS, % Ex. Ammonia, % HSD, % Coal, % NGL, % Power, % Total, %
1 SFC, Kota 0.00 0.00 57.57 0.55 0.00 0.00 0.01 38.41 0.00 3.46 100.00
2 Duncans 0.00 0.00 60.05 0.00 0.00 0.00 0.00 17.23 0.00 22.72 100.00
3 MFL 0.00 0.00 56.60 34.45 0.00 0.00 0.84 0.00 0.00 8.11 100.00
4 FACT 0.00 0.00 43.22 20.93 14.28 13.17 0.00 0.00 0.00 8.40 100.00
5 ZACL 0.00 0.00 69.82 29.87 0.00 0.00 0.00 0.00 0.00 0.31 100.00
6 SPIC 0.00 0.00 62.31 34.11 0.00 1.70 0.02 0.00 0.00 1.86 100.00
7 MCFL 0.00 0.00 67.72 32.28 0.00 0.00 0.00 0.00 0.00 0.00 100.00
8 IFFCO, Ph-I 0.00 0.00 63.28 0.00 7.40 0.00 0.06 29.09 0.00 0.17 100.00
Case-V Weighted average 0.00 0.00 62.09 16.98 1.38 0.49 0.10 12.43 0.00 6.53 100.00
Case-VI Wt. avg. excluding Outliers 0.00 0.00 62.36 16.92 1.20 0.31 0.10 12.61 0.00 6.50 100.00
Summary of the raw material percentage mix
Sr. No Name of the unit NG, % AG, % Naphtha, % FO, % LSHS, % Ex. Ammonia, % HSD, % Coal, % NGL, % Power, % Total, %
5 years average
Case-I Complete group 0.00 0.00 60.86 15.85 3.25 1.26 0.17 11.85 0.00 6.76 100.00
Case-II Excluding Outliers 0.00 0.00 61.97 16.53 1.03 0.54 0.18 12.91 0.00 6.83 100.00
3 years average
Case-III Complete group 0.00 0.00 61.23 16.11 3.00 1.35 0.24 0.00 11.45 6.62 100.00
Case-IV Excluding Outliers 0.00 0.00 62.52 16.70 1.07 0.40 0.26 0.00 12.40 6.66 100.00
Last year (01-02) average
Case-III Complete group 0.00 0.00 62.09 16.98 1.38 0.49 0.10 0.00 12.43 6.53 100.00
Case-IV Excluding Outliers 0.00 0.00 62.36 16.92 1.20 0.31 0.10 0.00 12.61 6.50 100.00
Annexure-VII
Group – III-B
Post-92 Naphtha Based Plants
Group-III B Post-92 Naphtha based plants
General Information
Name of the unit
Year of
commissioning
Yearly
reassessed
urea capacityFeed/Fuel used Sp energy consumption (Gcal/ MT urea)
(MT)Main
feedstock/fuel
Other
inputsDesign Guaranteed
Actual (avg.
of 5 yrs)
Actual
(2001-02)
IFFCO, Phulpur-II 1997 864600 NaphthaFO, LSHS,
HSD, CoalNA 5.910 6.520 6.111
CFCL-II 1999 864600 Naphtha NG 5.717 5.512 5.811 5.693
Group-III B Post-92 Naphtha based plants
Actual Urea Production
Name of the unit
Yearly
reassessed urea
capacityYear
(MT) 1997-98 1998-99 1999-2000 2000-2001 2001-2002
IFFCO, Phulpur-II 864600Actual
Production (MT)227049 836004 805551 853609 857742
Capacity
Utilisation (%)
Commissioning
year96.69 93.17 98.73 99.21
CFCL-II 864600Actual
Production (MT)- - 321041 854081 856972
Capacity
Utilisation (%)- -
Commissioning
year98.78 99.12
Group- III-B Post - 92 Naphtha based plants
Sr. No Name of the unit % of Naphtha used Yearly avg. urea Prodn. Specific energy consumption Gcal/ MT of Urea
MT (1997-98 to 2001-02) Feed Fuel Utilities Total
9 CFCL-II 98.00 677365 3.24 1.47 1.10 5.810
10 IFFCO, Ph-II 81.40 715991 3.257 2.053 1.211 6.520
Weighted average 89.47 696678 3.251 1.842 1.171 6.263
Percentage of total energy, % 51.91 29.41 18.69 100.00
Outlier plant : None
Specific energy consumption, Gcal/MT urea
5.810
6.5206.263
0
1
2
3
4
5
6
7
CFCL-II IFFCO, Ph-II Weighted average
Sp
ec
ific
en
erg
y,
Gc
al/
MT
Specific energy consumption, Gcal/MT urea
5.81
0
6.52
0
Avg. (6.263)
5.0
6.0
7.0
CFCL-II IFFCO, Ph-II
Sp
ec
ific
en
erg
y,
Gc
al/
MT
Group- III-B Post 92 Naphtha based plants Specific Energy Consumption, Gcal/ MT of Urea
Sr. No Name of the unit Year wise specific energy consumption Gcal/ MT of Urea % deviation
1997-98 1998-99 1999-00 2000-01 2001-02 Wt. Average from wt. average
1 IFFCO, Ph-II 6.959 6.388 6.386 7.072 6.111 6.520 4.103
2 CFCL-II 6.088 5.824 5.693 5.811 -7.217
Weighted average 6.959 6.388 6.301 6.448 5.902 6.263 0.000
Wt. avg. excluding Outliers 6.959 6.388 6.301 6.448 5.902 6.263
Group-I 5 years average 3 years average Last year (01-02) average
Specific energy consumption Complete group Excluding Outliers Complete group Excluding Outliers Complete group Excluding Outliers
Gcal/MT urea 6.263 6.263 6.206 6.206 5.902 5.902
Outliers plants in a group :
Plants having deviation beyond (+/-) 20 % on weighted average specific energy consumption have been considered as outliers.
All the plants of the group including outliers have been considered while calculating above weighted average specific energy consumption.
Group- III-B Post- 92 Naphtha based plants
Specific Energy Consumption, Gcal/ MT of Urea
Specific energy consumption, Gcal/MT urea
6.959
6.388 6.386
7.072
6.1116
6.5
7
7.5
1997-98 1998-99 1999-00 2000-01 2001-02
Gcal/M
T u
rea
IFFCO, Ph-II (6.520)
Specific energy consumption, Gcal/MT urea
6.088
5.693
5.824
5.5
6
6.5
1999-00 2000-01 2001-02
Gcal/M
T u
rea
CFCL-II (5.811)
Specific energy consumption, Gcal/MT urea
6.959
6.448
5.902
6.388 6.301
5.5
6
6.5
7
7.5
1997-98 1998-99 1999-00 2000-01 2001-02
Gcal/M
T u
rea
Avg. of group (6.264)
Group- III-B Post-92 Naphtha based plants Summary
Sr. No Name of the unit % Raw Material Mix Sp. energy
NG, % AG, % Naphtha, % FO, % LSHS, % Ex. Ammonia, % HSD, % NGL, % Coal, % Power, % Total, % Gcal/ MT urea
5 years average
Case-I Complete group 0.82 0.00 88.99 0.21 6.36 0.02 0.02 0.00 3.13 0.47 100.00 6.263
Case-II Excluding Outliers 0.82 0.00 88.99 0.21 6.36 0.02 0.02 0.00 3.13 0.47 100.00 6.263
3 years average
Case-III Complete group 0.74 0.00 88.05 0.00 6.40 0.03 0.02 0.00 4.39 0.36 100.00 6.206
Case-IV Excluding Outliers 0.74 0.00 88.05 0.00 6.40 0.03 0.02 0.00 4.39 0.36 100.00 6.206
Last year (01-02) average
Case-V Complete group 0.71 0.00 90.53 0.00 4.43 0.00 0.01 0.00 4.08 0.24 100.00 5.902
Case-VI Excluding Outliers 0.71 0.00 90.53 0.00 4.43 0.00 0.01 0.00 4.08 0.24 100.00 5.902
Group- III-B Post -92 Naphtha based plants Unitwise % Raw Material Mix
Weighted Average for 5 years
Sr. No Name of the unit NG, % AG, % Naphtha, % FO, % LSHS, % Ex. Ammonia, % HSD, % Coal, % NGL, % Power, % Total, %
1 IFFCO, Ph-II 0.00 0.00 81.40 0.38 11.72 0.03 0.03 5.76 0.00 0.68 100.00
2 CFCL-II 1.79 0.00 98.00 0.00 0.00 0.00 0.00 0.00 0.00 0.21 100.00
Case-I Weighted average 0.82 0.00 88.99 0.21 6.36 0.02 0.02 3.13 0.00 0.47 100.00
Case-II Wt. avg. excluding Outliers 0.82 0.00 88.99 0.21 6.36 0.02 0.02 3.13 0.00 0.47 100.00
Weighted Average for 3 years
Sr. No Name of the unit NG, % AG, % Naphtha, % FO, % LSHS, % Ex. Ammonia, % HSD, % Coal, % NGL, % Power, % Total, %
1 IFFCO, Ph-II 0.00 0.00 80.90 0.00 11.00 0.05 0.03 7.55 0.00 0.47 100.00
2 CFCL-II 1.78 0.00 98.00 0.00 0.00 0.00 0.00 0.00 0.00 0.21 100.00
Case-III Weighted average 0.74 0.00 88.05 0.00 6.40 0.03 0.02 4.39 0.00 0.36 100.00
Case-IV Wt. avg. excluding Outliers 0.74 0.00 88.05 0.00 6.40 0.03 0.02 4.39 0.00 0.36 100.00
Latest year (2001-02)
Sr. No Name of the unit NG, % AG, % Naphtha, % FO, % LSHS, % Ex. Ammonia, % HSD, % Coal, % NGL, % Power, % Total, %
1 IFFCO, Ph-II 0.00 0.00 83.27 0.00 8.55 0.00 0.02 7.88 0.00 0.28 100.00
2 CFCL-II 1.48 0.00 98.32 0.00 0.00 0.00 0.00 0.00 0.00 0.20 100.00
Case-V Weighted average 0.71 0.00 90.53 0.00 4.43 0.00 0.01 4.08 0.00 0.24 100.00
Case-VI Wt. avg. excluding Outliers 0.71 0.00 90.53 0.00 4.43 0.00 0.01 4.08 0.00 0.24 100.00
Summary of the raw material percentage mix
Sr. No Name of the unit NG, % AG, % Naphtha, % FO, % LSHS, % Ex. Ammonia, % HSD, % Coal, % NGL, % Power, % Total, %
5 years average
Case-I Complete group 0.82 0.00 88.99 0.21 6.36 0.02 0.02 3.13 0.00 0.47 100.00
Case-II Excluding Outliers 0.82 0.00 88.99 0.21 6.36 0.02 0.02 3.13 0.00 0.47 100.00
3 years average
Case-III Complete group 0.74 0.00 88.05 0.00 6.40 0.03 0.02 0.00 4.39 0.36 100.00
Case-IV Excluding Outliers 0.74 0.00 88.05 0.00 6.40 0.03 0.02 0.00 4.39 0.36 100.00
Last year (01-02) average
Case-V Complete group 0.71 0.00 90.53 0.00 4.43 0.00 0.01 0.00 4.08 0.24 100.00
Case-VI Excluding Outliers 0.71 0.00 90.53 0.00 4.43 0.00 0.01 0.00 4.08 0.24 100.00
Annexure-VIII
Group – IV
FO/LSHS Based Plants
Group-IV FO/LSHS based plants
General Information
Name of the unit
Year of
commissioning
Yearly
reassessed
urea capacityFeed/Fuel used Sp energy consumption (Gcal/ MT urea)
(MT)Main
feedstock/fuel
Other
inputsDesign Guaranteed
Actual (avg.
of 5 yrs)
Actual
(2001-02)
FCI, Sindri 1979 330000 LSHS, FO Coal 8.500 NA 17.459 NA
GNFC, Bharuch 1982 643500 LSHS, FONG, HSD,
Coal7.622 7.622 8.170 8.032
NFL, Bhatinda 1979 511500 FO Coal, HSD NA NA 9.712 10.362
NFL, Nangal 1978 366300Naphtha, FO,
LSHSCoal, LDO NA NA 9.987 9.894
NFL, Panipat 1979 511500 FO, LSHS Coal, LDO NA NA 9.967 9.678
NLC, Nevveli 1966/1979 152000 FO, LSHS None 13.000 NA 16.259 14.863
Group-IV FO/LSHS based plants
Actual Urea Production
Name of the unit
Yearly
reassessed urea
capacityYear
(MT) 1997-98 1998-99 1999-2000 2000-2001 2001-2002
FCI, Sindri 330000Actual
Production (MT)208588 223151 306005 237517 NA
Capacity
Utilisation (%)63.21 67.62 92.73 71.97
GNFC, Bharuch 643500Actual
Production (MT)631279 660894 615781 639325 644080
Capacity
Utilisation (%)98.10 102.70 95.69 99.35 100.09
NFL, Bhatinda 511500Actual
Production (MT)567367 503710 543345 478600 514130
Capacity
Utilisation (%)110.92 98.48 106.23 93.57 100.51
NFL, Nangal 366300Actual
Production (MT)406332 388505 344284 300257 458175
Capacity
Utilisation (%)110.93 106.06 93.99 81.97 125.08
NFL, Panipat 511500Actual
Production (MT)562250 535747 532845 492776 511538
Capacity
Utilisation (%)109.92 104.74 104.17 96.34 100.01
NLC, Nevveli 152000Actual
Production (MT)102577 67834 17225 97851 61965
Capacity
Utilisation (%)67.48 44.63 11.33 64.38 40.77
Group- IV FO/LSHS based plants
Sr. No Name of the unit % of FO/LSHS used Yearly avg. urea Prodn. Specific energy consumption Gcal/ MT of Urea
MT (1997-98 to 2001-02) Feed Fuel Utilities Total
1 FCI, Sindri 37.26 243815 5.688 0.457 11.315 17.459
2 GNFC, Bharuch 60.80 638272 4.226 0.000 3.944 8.170
3 NFL, Bhatinda 56.72 521430 4.874 0.000 5.689 10.564
4 NFL, Nangal 54.49 379511 4.968 0.000 5.020 9.987
5 NFL, Panipat 56.39 526959 4.808 0.000 5.159 9.967
6 NLC, Nevveli 39.82 69490 6.475 0.000 9.785 16.259
Weighted average 54.90 396580 4.813 0.038 5.575 10.426
Percentage of total energy, % 46.16 0.37 53.47 100.000
Outlier plants : FCI, Sindri, GNFC Bharuch and NLC, Nevveli
Specific energy consumption, Gcal/MT urea
17.459
8.170
10.5649.987 9.967
16.259
10.426
0
2
4
6
8
10
12
14
16
18
20
FCI, Sindri GNFC, Bharuch NFL, Bhatinda NFL, Nangal NFL, Panipat NLC, Nevveli Weighted
average
Sp
ec
ific
en
erg
y,
Gc
al/
MT
Specific energy consumption, Gcal/MT urea
17.4
59
8.17
0
10.5
64
9.98
7
9.96
7
16.2
59
Avg. (10.426)
Avg. excl. outlier (10.190)
6
8
10
12
14
16
18
20
FCI, Sindri GNFC, Bharuch NFL, Bhatinda NFL, Nangal NFL, Panipat NLC, Nevveli
Sp
ec
ific
en
erg
y,
Gc
al/
MT
Group- IV FO/LSHS based plants Specific Energy Consumption, Gcal/ MT of Urea
Sr. No Name of the unit Year wise specific energy consumption Gcal/ MT of Urea % deviation
1997-98 1998-99 1999-00 2000-01 2001-02 Wt. Average from wt. average
1 FCI, Sindri 16.568 20.747 14.466 19.010 17.459 67.456
2 GNFC, Bharuch 8.308 8.476 8.136 7.888 8.032 8.170 -21.638
3 NFL, Bhatinda 10.210 10.748 10.629 10.932 10.362 10.564 1.324
4 NFL, Nangal 9.937 10.053 10.115 9.965 9.894 9.987 -4.211
5 NFL, Panipat 9.807 10.129 10.255 9.960 9.678 9.967 -4.402
6 NLC, Nevveli 15.706 17.105 27.010 15.244 14.863 16.259 55.947
Weighted average 10.352 10.983 10.436 10.765 9.546 10.426 0.000
Wt. avg. excluding Outliers 9.990 10.327 10.364 10.327 9.982 10.190
Group-I 5 years average 3 years average Last year (01-02) average
Specific energy consumption Complete group Excluding Outliers Complete group Excluding Outliers Complete group Excluding Outliers
Gcal/MT urea 10.426 10.190 10.163 10.067 9.546 9.982 Outliers plants in a group :
Plants having deviation beyond (+/-)20 % on weighted average specific energy consumption have been considered as outliers.
All the plants of the group including outliers have been considered while calculating above weighted average specific energy consumption.
For NFL Bhtinda, lowest specific energy consumption of 10.210 Gcal/MT urea and urea production of 567367 MT achieved in the year 1997-87 have been considered for each of the three years for calculation of three years group average for group-IV.
Group- IV FO/ LSHS based plants
Specific Energy Consumption, Gcal/ MT of Urea
Group- IV FO/ LSHS based plants
Specific Energy Consumption, Gcal/ MT of Urea
Specific energy consumption, Gcal/MT urea
16.5
68
20.7
47
14.4
66
19.0
10
14
15
16
17
18
19
20
21
22
1997-98 1998-99 1999-00 2000-01
Gca
l/M
T u
rea
FCI, Sindri (17.459)
Specific energy consumption, Gcal/MT urea
8.308
8.476
8.136
7.888
8.032
7.5
8
8.5
9
1997-98 1998-99 1999-00 2000-01 2001-02
Gca
l/M
T u
rea
GNFC, Bharuch (8.170)
Specific energy consumption, Gcal/MT urea
10.210
10.748 10.62910.932
10.362
8.0
8.5
9.0
9.5
10.0
10.5
11.0
11.5
12.0
1997-98 1998-99 1999-00 2000-01 2001-02
Gca
l/M
T u
rea
NFL, Bhantinda (9.712)
Specific energy consumption, Gcal/MT urea
9.80710.129 10.255
9.9609.678
8.5
9
9.5
10
10.5
11
11.5
12
1997-98 1998-99 1999-00 2000-01 2001-02
Gca
l/M
T u
rea
NFL, Panipat (9.967)
Specific energy consumption, Gcal/MT urea
15.70617.105
27.010
15.244 14.863
10.0
12.0
14.0
16.0
18.0
20.0
22.0
24.0
26.0
28.0
30.0
1997-98 1998-99 1999-00 2000-01 2001-02
Gca
l/M
T u
rea
NLC, Nevveli (16.259)
Specific energy consumption, Gcal/MT urea
9.93
710
.053
10.1
15
9.96
5
9.89
4
8
9
10
11
12
1997-98 1998-99 1999-00 2000-01 2001-02
Gca
l/M
T u
rea
NFL, Nangal (9.987)
Specific energy consumption, Gcal/MT urea
10.352
10.983
10.43610.765
9.546
7.5
8.5
9.5
10.5
11.5
1997-98 1998-99 1999-00 2000-01 2001-02
Gca
l/M
T u
rea
Avg. of group (10.236)
Specific energy consumption, Gcal/MT urea
9.990
10.327 10.364 10.327
9.982
9
10
11
12
1997-98 1998-99 1999-00 2000-01 2001-02
Gca
l/M
T u
rea
Avg. excl. outliers (9.351)
Group- IV FO/LSHS based plants Summary
Sr. No Description % Raw Material Mix Sp. energy
NG, % AG, % Naphtha, % FO, % LSHS, % Ex. steam, % HSD, % Coal, % NGL, % Power, % Total, % Gcal/ MT urea
5 years average
Case-I Complete group 1.45 0.00 0.25 22.53 30.58 1.07 0.03 38.83 0.00 5.26 100.00 10.426
Case-II Excluding Outliers 0.00 0.00 0.44 29.75 26.27 0.00 0.05 39.67 0.00 3.82 100.00 10.190
3 years average
Case-III Complete group 0.68 0.00 0.43 22.83 29.67 0.89 0.03 41.02 0.00 4.44 100.00 10.163
Case-IV Excluding Outliers 0.00 0.00 0.75 31.94 23.43 0.00 0.05 39.78 0.00 4.03 100.00 10.067
Last year (01-02) average
Case-V Complete group 0.67 0.00 1.54 30.74 23.33 1.01 0.02 37.50 0.00 5.20 100.00 9.546
Case-VI Excluding Outliers 0.70 0.00 1.61 30.30 24.41 0.00 0.03 39.22 0.00 3.74 100.00 9.982
Group- IV FO/ LSHS based plants Unitwise % Raw Material Mix
Weighted Average for 5 years
Sr. No Name of the unit NG, % AG, % Naphtha, % FO, % LSHS, % Ex. Steam, % HSD, % Coal, % NGL, % Power, % Total, %
1 FCI, Sindri 0.00 0.00 0.00 20.08 17.18 0.00 0.00 54.40 0.00 8.34 100.00
2 GNFC, Bharuch 6.99 0.00 0.00 3.96 56.84 0.00 0.00 32.21 0.00 0.00 100.00
3 NFL, Bhatinda 0.00 0.00 0.00 56.72 0.00 0.00 0.07 41.22 0.00 1.99 100.00
4 NFL, Nangal 0.00 0.00 1.69 7.35 47.14 0.00 0.02 33.16 0.00 10.64 100.00
5 NFL, Panipat 0.00 0.00 0.00 17.64 38.75 0.00 0.06 42.73 0.00 0.82 100.00
6 NLC, Nevveli 0.00 0.00 0.00 24.44 15.38 23.77 0.00 0.00 0.00 36.41 100.00
Case-I Weighted average 1.45 0.00 0.25 22.53 30.58 1.07 0.03 38.83 0.00 5.26 100.00
Case-II Wt. avg. excluding Outliers 0.00 0.00 0.44 29.75 26.27 0.00 0.05 39.67 0.00 3.82 100.00
Weighted Average for 3 years
Sr. No Name of the unit NG, % AG, % Naphtha, % FO, % LSHS, % Ex. Steam, % HSD, % Coal, % NGL, % Power, % Total, %
1 FCI, Sindri 0.00 0.00 0.00 16.14 20.84 0.00 0.00 59.33 0.00 3.69 100.00
2 GNFC, Bharuch 3.31 0.00 0.00 0.20 60.37 0.00 0.00 36.12 0.00 0.00 100.00
3 NFL, Bhatinda 0.00 0.00 0.00 56.40 0.00 0.00 0.07 41.47 0.00 2.06 100.00
4 NFL, Nangal 0.00 0.00 2.92 6.24 46.83 0.00 0.03 32.71 0.00 11.27 100.00
5 NFL, Panipat 0.00 0.00 0.00 24.33 31.61 0.00 0.05 43.07 0.00 0.93 100.00
6 NLC, Nevveli 0.00 0.00 0.00 38.59 0.94 23.06 0.00 0.00 0.00 37.41 100.00
Case-III Weighted average 0.68 0.00 0.43 22.83 29.67 0.89 0.03 41.02 0.00 4.44 100.00
Case-IV Wt. avg. excluding Outliers 0.00 0.00 0.75 31.94 23.43 0.00 0.05 39.78 0.00 4.03 100.00
Latest year (2001-02)
Sr. No Name of the unit NG, % AG, % Naphtha, % FO, % LSHS, % Ex. Steam, % HSD, % Coal, % NGL, % Power, % Total, %
1 FCI, Sindri - - - - - - - - - - 0.00
2 GNFC, Bharuch 2.71 0.00 0.00 0.15 57.12 0.00 0.00 40.02 0.00 0.00 100.00
3 NFL, Bhatinda 0.00 0.00 0.00 56.19 0.00 0.00 0.06 41.98 0.00 1.77 100.00
4 NFL, Nangal 0.00 0.00 7.08 6.53 42.42 0.00 0.04 30.83 0.00 13.10 100.00
5 NFL, Panipat 0.00 0.00 0.00 55.71 0.00 0.00 0.00 43.11 0.00 1.18 100.00
6 NLC, Nevveli 0.00 0.00 0.00 40.18 0.00 22.95 0.00 0.00 0.00 36.87 100.00
Case-V Weighted average 0.67 0.00 1.54 30.74 23.33 1.01 0.02 37.50 0.00 5.20 100.00
Case-VI Wt. avg. excluding Outliers 0.70 0.00 1.61 30.30 24.41 0.00 0.03 39.22 0.00 3.74 100.00
Summary of the raw material percentage mix
Sr. No Description NG, % AG, % Naphtha, % FO, % LSHS, % Ex. Steam, % HSD, % Coal, % NGL, % Power, % Total, %
5 years average
Case-I Complete group 1.45 0.00 0.25 22.53 30.58 1.07 0.03 38.83 0.00 5.26 100.00
Case-II Excluding Outliers 0.00 0.00 0.44 29.75 26.27 0.00 0.05 39.67 0.00 3.82 100.00
3 years average
Case-III Complete group 0.68 0.00 0.43 22.83 29.67 0.89 0.03 41.02 0.00 4.44 100.00
Case-IV Excluding Outliers 0.00 0.00 0.75 31.94 23.43 0.00 0.05 39.78 0.00 4.03 100.00
Last year (01-02) average
Case-V Complete group 0.67 0.00 1.54 30.74 23.33 1.01 0.02 37.50 0.00 5.20 100.00
Case-VI Excluding Outliers 0.70 0.00 1.61 30.30 24.41 0.00 0.03 39.22 0.00 3.74 100.00
Annexure-IX
Group –V
Mixed Energy Based Plants
Group-V Mixed energy plants
General Information
Name of the unit
Year of
commissioning
Yearly
reassessed
urea capacityFeed/Fuel used Sp energy consumption (Gcal/ MT urea)
(MT)Main
feedstock/fuelOther inputs Design Guaranteed
Actual (avg.
of 5 yrs)
Actual
(2001-02)
GSFC 1967/1969 370600 NG, AG, Naphtha LSHS 8.411 8.411 7.546 7.054
RCF, Thal 1985 1485000 NG, Naphtha None 6.03 6.03 7.151 7.218
IFFCO, Kalol 1975/1997 544500 NG, Naphtha AG, LSHS 7.113 NA 6.757 6.528
Group-V Mixed energy plants
Actual Urea Production
Name of the unit
Yearly
reassessed urea
capacityYear
(MT) 1997-98 1998-99 1999-2000 2000-2001 2001-2002
GSFC 370600Actual
Production (MT)338240 357000 400930 337800 359300
Capacity
Utilisation (%)91.27 96.33 108.18 91.15 96.95
RCF, Thal 1485000Actual
Production (MT)1401750 1442900 1488585 1329400 1451150
Capacity
Utilisation (%)94.39 97.16 100.24 89.52 97.72
IFFCO, Kalol 544500Actual
Production (MT)421287 518030 471843 487809 550297
Capacity
Utilisation (%)77.37 95.14 86.66 89.59 101.06
Group- V Mixed Energy Based plants
Sr. No Name of the unit % of Naphtha used Yearly avg. urea Prodn. Specific energy consumption Gcal/ MT of Urea
MT (1997-98 to 2001-02) Feed Fuel Utilities Total
1 GSFC 17.78 358654 3.890 0.837 2.819 7.546
2 RCF, Thal 25.87 1422757 3.300 2.052 1.800 7.151
3 IFFCO, Kalol 28.43 489853 3.304 3.154 0.300 6.757
Wt. average 25.15 757088 3.394 2.098 1.637 7.129
Percentage of total energy, % 47.61 29.43 22.96 100.00
Outlier plant : None
Specific energy consumption
7.5467.151
6.7577.129
0
1
2
3
4
5
6
7
8
9
10
GSFC RCF, Thal IFFCO, Kalol Wt. average
Sp
ecific
en
erg
y,
Gca
l/ M
T
Specific energy consumption
7.546
7.151
6.757Avg. (7.129)
5.5
6
6.5
7
7.5
8
GSFC RCF, Thal IFFCO, Kalol
Sp
ecific
en
erg
y,
Gca
l/ M
T
Group- V Mixed Energy based plants Specific Energy Consumption, Gcal/ MT of Urea
Sr. No Name of the unit Year wise specific energy consumption Gcal/ MT of Urea % deviation
1997-98 1998-99 1999-00 2000-01 2001-02 Wt. Average from wt. average
1 GSFC 7.522 7.911 7.497 7.765 7.054 7.546 5.848
2 RCF, Thal 7.143 7.148 7.119 7.129 7.218 7.151 0.315
3 IFFCO, Kalol 6.876 6.787 6.867 6.776 6.528 6.757 -5.218
Weighted average 7.150 7.185 7.133 7.149 7.032 7.129 0.000
Wt. avg. excluding Outliers 7.150 7.185 7.133 7.149 7.032 7.129
Group-I 5 years average 3 years average Last year (01-02) average
Specific energy consumption Complete group Excluding Outliers Complete group Excluding Outliers Complete group Excluding Outliers
Gcal/MT urea 7.129 7.129 7.103 7.103 7.032 7.032
Outliers plants in a group :
Plants having deviation beyond (+/-) 20 % on weighted average specific energy consumption have been considered as outliers.
All the plants of the group including outliers have been considered while calculating above weighted average specific energy consumption.
Group- V Mixed Energy based plants
Specific Energy Consumption, Gcal/ MT of Urea
Specific energy consumption, Gcal/MT urea
7.52
2 7.91
1
7.49
7 7.76
5
7.05
4
6.5
7
7.5
8
8.5
9
1997-98 1998-99 1999-00 2000-01 2001-02
Gcal/M
T u
rea
GSFC (7.546)
Specific energy consumption, Gcal/MT urea
7.143 7.1487.119 7.129
7.218
7
7.5
1997-98 1998-99 1999-00 2000-01 2001-02
Gca
l/M
T u
rea
RCF, Thal (7.151)
Specific energy consumption, Gcal/MT urea
7.1507.185
7.133 7.149
7.032
6.5
7
7.5
1997-98 1998-99 1999-00 2000-01 2001-02
Gca
l/M
T u
rea
Avg. of group (7.129)
Specific energy consumption, Gcal/MT urea
6.87
6
6.78
7 6.86
7
6.77
6
6.52
8
6
6.5
7
7.5
1997-98 1998-99 1999-00 2000-01 2001-02
Gca
l/M
T u
rea
IFFCO, Kalol (6.757)
Group- V Mixed Energy based plants Summary
Sr. No Description % Raw Material Mix Sp. energy
NG, % AG, % Naphtha, % FO, % LSHS, % Ex. Ammonia, % HSD, % NGL, % Coal, % Power, % Total, % Gcal/ MT urea
5 years average
Case-I Complete group 60.87 4.60 25.04 0.00 5.95 0.18 0.00 0.00 0.00 3.36 100.00 7.129
Case-II Excluding Outliers 60.87 4.60 25.04 0.00 5.95 0.18 0.00 0.00 0.00 3.36 100.00 7.129
3 years average
Case-III Complete group 56.95 3.68 30.03 0.00 6.03 0.30 0.00 0.00 0.00 3.00 100.00 7.103
Case-IV Excluding Outliers 56.95 3.68 30.03 0.00 6.03 0.30 0.00 0.00 0.00 3.00 100.00 7.103
Last year (01-02) average
Case-V Complete group 49.35 4.62 37.10 0.00 5.77 0.88 0.00 0.00 0.00 2.28 100.00 7.032
Case-VI Excluding Outliers 49.35 4.62 37.10 0.00 5.77 0.88 0.00 0.00 0.00 2.28 100.00 7.032
Group- V Mixed Energy based plants Unitwise Raw Material Mix
Weighted Average for 5 years
Sr. No Name of the unit NG, % AG, % Naphtha, % FO, % LSHS, % Ex. Ammonia, % HSD, % Coal, % NGL, % Power, % Total, %
1 GSFC 41.00 6.79 17.78 0.00 20.56 0.00 0.00 0.00 0.00 13.87 100.00
2 RCF, Thal 73.62 0.00 25.87 0.00 0.00 0.29 0.00 0.00 0.00 0.22 100.00
3 IFFCO, Kalol 37.90 16.96 28.43 0.00 12.28 0.00 0.00 0.00 0.00 4.44 100.00
Case-I Weighted average 60.87 4.60 25.04 0.00 5.95 0.18 0.00 0.00 0.00 3.36 100.00
Case-II Wt. avg. excluding Outliers 60.87 4.60 25.04 0.00 5.95 0.18 0.00 0.00 0.00 3.36 100.00
Weighted Average for 3 years
Sr. No Name of the unit NG, % AG, % Naphtha, % FO, % LSHS, % Ex. Ammonia, % HSD, % Coal, % NGL, % Power, % Total, %
1 GSFC 49.15 1.22 16.20 0.00 21.45 0.00 0.00 0.00 0.00 11.98 100.00
2 RCF, Thal 65.89 0.00 33.47 0.00 0.00 0.48 0.00 0.00 0.00 0.17 100.00
3 IFFCO, Kalol 36.31 16.77 30.82 0.00 11.78 0.00 0.00 0.00 0.00 4.32 100.00
Case-III Weighted average 56.95 3.68 30.03 0.00 6.03 0.30 0.00 0.00 0.00 3.00 100.00
Case-IV Wt. avg. excluding Outliers 56.95 3.68 30.03 0.00 6.03 0.30 0.00 0.00 0.00 3.00 100.00
Latest year (2001-02)
Sr. No Name of the unit NG, % AG, % Naphtha, % FO, % LSHS, % Ex. Ammonia, % HSD, % Coal, % NGL, % Power, % Total, %
1 GSFC 46.01 0.00 22.72 0.00 22.48 0.00 0.00 0.00 0.00 8.79 100.00
2 RCF, Thal 53.98 0.00 44.52 0.00 0.00 1.39 0.00 0.00 0.00 0.11 100.00
3 IFFCO, Kalol 38.23 21.35 25.59 0.00 10.80 0.00 0.00 0.00 0.00 4.03 100.00
Case-V Weighted average 49.35 4.62 37.10 0.00 5.77 0.88 0.00 0.00 0.00 2.28 100.00
Case-VI Wt. avg. excluding Outliers 49.35 4.62 37.10 0.00 5.77 0.88 0.00 0.00 0.00 2.28 100.00
Summary of the raw material percentage mix
Sr. No Description NG, % AG, % Naphtha, % FO, % LSHS, % Ex. Ammonia, % HSD, % Coal, % NGL, % Power, % Total, %
5 years average
Case-I Complete group 60.87 4.60 25.04 0.00 5.95 0.18 0.00 0.00 0.00 3.36 100.00
Case-II Excluding Outliers 60.87 4.60 25.04 0.00 5.95 0.18 0.00 0.00 0.00 3.36 100.00
3 years average
Case-III Complete group 56.95 3.68 30.03 0.00 6.03 0.30 0.00 0.00 0.00 3.00 100.00
Case-IV Excluding Outliers 56.95 3.68 30.03 0.00 6.03 0.30 0.00 0.00 0.00 3.00 100.00
Last year (01-02) average
Case-V Complete group 49.35 4.62 37.10 0.00 5.77 0.88 0.00 0.00 0.00 2.28 100.00
Case-VI Excluding Outliers 49.35 4.62 37.10 0.00 5.77 0.88 0.00 0.00 0.00 2.28 100.00
Annexure-X
INTERNATIONAL BENCHMARKING OF ENERGY CONSUMPTION FOR AMMONIA AND UREA PRODUCTION 1.0 Introduction
It is difficult to obtain authentic energy consumption data for ammonia and urea plants in other countries of the world. China, US and India are the 3 largest producers of ammonia and urea accounting for 41% of world ammonia and 47% of urea production in the year 2000. Some data for ammonia plants in US was made available to FAI by the International Fertilizer Development Centre (IFDC), Alabama on behalf of The Fertilizer Institute, USA. The data used in this report is based on the communication sent by IFDC vide their letter dated April 8, 1997 to DG, FAI for ammonia plant energy consumption. Energy consumption data for urea plants was not collected by IFDC. Information on Chinese plants is rather scarce and the only source available for energy consumption data is a paper presented in Production and Trade Committee Meeting of International Fertilizer Industry Association (IFA) in Shanghai in October, 2000. Data for average energy consumption of ammonia plants in the world is sourced from a paper presented in the Ammonia Safety Symposium of American Institute of Chemical Engineers (AIChE) in Montreal, Canada in January 2002. Authentic data on Indian industry is available as FAI collects energy consumption data for ammonia and urea plants. Data from these sources has been used in the present benchmarking.
2.0 Factors having bearing on energy consumption
There are a number of parameters such as feedstock, location, plant capacity and configuration, etc. which have bearing on the energy consumption of ammonia and urea plants. Impact of these parameters is discussed in the following paragraphs. 2.1 Feedstock
Types of feedstock used in various plants include natural gas, naphtha, fuel oil and coal in various parts of the world. Natural gas is the most preferred feedstock and requires the lowest energy per tonne urea. Quality of the feedstock also affects the energy consumption to some extent. In most countries where natural gas is available, ammonia is produced using natural gas as feedstock. In major urea exporting countries, 100% of ammonia/urea capacity is based on natural gas (Table 1). Other feedstock like naphtha, fuel oil and coal contribute to urea production only in those countries where sufficient natural gas is not available. China and India have substantial fertilizer capacity utilizing feedstock other than natural gas.
2.2 Vintage, Technology and plant configuration
Ammonia production technology has evolved over a long period of time and standard plant sizes were primarily governed by the maximum available sizes of key equipment. The first generation commercial plants commission in 1960‟s were of capacities of around 300-450 TPD and utilized reciprocating compressors. Advent of centrifugal compressors witnessed the construction of ammonia plants with capacity of 600 TPD or higher. This brought down the energy consumption of ammonia production significantly. Next generation ammonia plants were upscaled to 900-1000 TPD which resulted in further reduction in energy consumption. Last generation plants were of 1350 TPD which gave even better energy consumption. Thus, vintage, size, technology level and plant configuration determine the energy efficiency levels. For example, large single stream ammonia and urea plants using centrifugal compressors will have lower energy consumption than old, small size and multi-stream plants using reciprocating compressors.
2.3 Ambient Conditions
Ambient temperature has an effect on the level of energy consumption in ammonia and urea plants. Relatively high temperatures of cooling water and ambient air, such as in countries like India, result in higher energy consumption as compared to plants in colder countries. There is difference of almost 10° C in the average cooling water temperature in India as compared to USA, Europe, and even in China. This will make a difference in energy consumption in the two locations, other things being equal.
2.4 Product Slate of the Unit
The end use of ammonia for producing urea or some other product like ammonium nitrate or complex fertilizers has a bearing on ammonia plant energy consumption. Production of urea requires recovery of high purity carbon dioxide to the maximum extent possible. In fact ammonia plants using lean natural gas in India are not able to generate enough carbon dioxide for proportionate urea production. In such a situation, production of urea to the full capacity requires burning part of the synthesis gas as fuel in ammonia plants which results in higher energy consumption. In many countries where urea is not the final fertilizer product, complete recovery of high purity carbon dioxide is not required. This saves the energy consumption in CO2 removal section of ammonia plant as compared to a plant where complete recovery of carbon dioxide is made.
3.0 Energy accounting methods
Energy used in production of ammonia and urea plants is the total hydrocarbon feed and fuel used along with non-hydrocarbon sources like coal and power. The conversion of hydrocarbons to energy units can be done either on the basis of high heating value (HHV) or low heating value (LHV), the former being higher. There is import of power either from captive power plant or the grid to ammonia and urea plants. There is also
an import and export of steam to and from ammonia and urea plants. Conversion of these utilities from their own units to energy units is carried out using different conversion factors by different plants in the world as there is no universal standard for such conversions. FAI has been collecting energy consumption data for ammonia and urea plants in a standardized form since 1987-88. All feedstock and fuel are converted to energy using low heating value. The power imported to ammonia and urea plant is converted to energy using 1 KWH=2520 kcal conversion factor. Steam import/export is accounted for by using its enthalpy value. The energy consumption arrived at by such an accounting methodology reflects the battery limit ammonia and urea plants energy consumption. It does not take into account the conversion efficiencies of captive power plant and steam generation plant and therefore cannot be directly used for comparing the energy consumption of the entire complex. However, this may be comparable to methodology adopted in those countries where utilities like power are usually independent of ammonia production. From the above discussion it is evident that there are grey areas in source of data, non-comparable plant configurations and non-standardized energy accounting factors, and therefore a quantitative conclusion could not be drawn by comparing energy consumption data in different countries without first making the data comparable. The energy consumption figures should therefore be considered as ‘order of magnitude figures’ for drawing qualitative conclusion and for non-precise comparisons. A difference in energy consumption by a few percent should be viewed as “within the same band of energy efficiency” rather than ranking them higher or lower.
4.0 Comparison of Energy Consumption
4.1 Fertilizer plants in USA
Most of the ammonia plants in USA are based on natural gas as feedstock and therefore a comparison of their energy consumption data has been made with Indian gas based plants. There were 19 gas based plants operating in India in 1995-96. It can be seen from Table 2 that weighted average consumption of 9.16 mkcal/MT of ammonia for India gas based plants for the year 1995-96 is much lower than 9.94 mkcal/tonne average energy consumption of 42 US ammonia plants in 1995. Actual energy consumption of India urea plants is also lower by the same order of magnitude in comparison to urea plants in USA (Table 3), data for US plants having been derived from ammonia plant data.
4.2 Fertilizer plants in China
There are a large number of small and medium size fertilizer plants in China. Small and medium size capacity is predominantly based on coal, generally producing Ammonium Bicarbonate. Large size ammonia plants account for only about 30% of ammonia capacity in China. Most gas based ammonia plants in
China are of 1000 TPD capacity and were commissioned in 1990‟s. Comparison of Chinese gas based plants has therefore been made with standard size gas based plants in India excluding small size or mixed feed or very old technology plants. The comparison of energy consumption of Indian and Chinese plants is shown in Table 4. It can be seen that the energy consumption of 15 Indian gas based plants at 8.51 mkCal/tonne of ammonia during 1999-2000 is lower than 8.77 mkCal for 8 large size Chinese gas based ammonia plants. There are only a few naphtha based ammonia plants in China and all of them are of 1000 TPD capacity. These plants were commissioned around 1980. The Indian naphtha based ammonia plants have capacities in the range of 415 TPD to 1350 TPD and the vintage of several of them goes back to as early as 1969. The energy consumption of 3 Indian post-1980 naphtha based plants is 9.28 mkCal compared to 9.25 mkCal for 5 large size post-1980 Chinese plants (Table 4). Even the composite average of all naphtha based plants in India including small plants using reciprocating compressors is 9.81 mkCal per MT ammonia which is of the same order after normalizing for vintage and size. The derived average energy consumption figures for Indian and Chinese urea plants are shown in Table 5. The comparative figures are similar to those for ammonia plants. There are very few fuel oil based ammonia plants in the world. There are 7 fuel oil based plants in China all with the capacity of 1000 TPD. Most of these plants are utilizing modern technology and commissioned in 1980‟s and 90‟s. India had 6 fuel oil based plants operating during 1999-2000 Indian fuel oil based plants other than GNFC, Bharuch utilize very old Shell gasification technology. The efficiency of these 5 plants cannot be compared with Chinese plants which use different technology. The energy consumption level of the 7 fuel oil based Chinese plants was 10.92 mkCal per tonne of ammonia during the year 1999. Best energy consumption of GNFC plant was 11.45 during 2000-01. In any case use of fuel oil as feedstock, all over the world, had been resorted to on strategic considerations and not on economic considerations.
4.3 All world plants
Some available information on average energy consumption of world ammonia plants is shown in Table 6 & 7. It can be seen from Table 6 that average energy consumption of 25% most efficient Indian ammonia plants at 8.41 mkCal/MT is lower than 8.49 mkCal for the most efficient 25% ammonia plants in the world.
5.0 Conclusion
A comparison of energy consumption figures of ammonia, urea plants of the three largest producers in the world shows that energy consumption of Indian gas based plants is better than similar plants in USA and China. In case of naphtha based plants the energy consumption figures are nearly equal on comparable basis.
Table 1: Share of Natural Gas in Ammonia Production Capacity
Country Percent Share
USA >95
Italy 100
Ukraine 100
UAE 100
Iran 100
Kuwait 100
Saudi Arabia 100
Russia 100
Netherlands 100
World * 83
Source: Survey of Ammonia Capacities 2000, IFA, Paris
* Excluding mini plants in China.
Table 2: Energy Consumption Data USA & Indian Ammonia Plants
US Ammonia Plants (All Gas Based)
Daily Capacity, TPD <900 >900 Total/Weighted Average
No. of Plants in USA 13 29 42
Energy Consumption mkcal/MT (1995)
10.54 9.69 9.94
Indian Gas Based Ammonia Plants
Daily Capacity <900 * >900 Total/Weighted Average
No. of Plants 7 15 22
Energy Consumption mkCal/MT (1995-96)
11.59 8.88 9.16
Source: Ammonia Production Survey 1996 – International FertilizerDevelopment Centre, USA; FAI Data for Indian Plants.
* Small Indian plants included GSFC I & II, Namrup I & II and III, Trombay V and
Deepak Fertilizers & Petrochemicals Ltd., Taloja.
Table 3: Comparison of Urea Plant Energy of USA & Indian Plants (1995-96)
Average Energy (mkCal/MT)
Derived Avg. Energy for Urea Plants Based on US Ammonia Plants Energy (1995)
7.27
Energy Consumption of Indian Gas Based Plants (1995-96)
6.63
Table 4: Feedstock wise Energy Data of Indian and Chinese Ammonia Plants (1999-2000)
Indian Plants Chinese Plants
Feedstock No.of Plants Average Energy (mkCal/MT)
No.of plants Average Energy MkCal/MT)
Gas 15 8.51* 8 8.77
Naphtha 3 9.28** 5 9.25
* Excluding HFC, Namrup-III, Trombay-V & GSFC, Baroda which are either on mixed
feed, small size or very old technology. ** Indian Plants commissioned in 1980‟s. Source: Wang Wenshan, “The Status Quo of China‟s Synthetic Ammonia and Urea Production
Based on Natural Gas and Oil” – IFA Production and Industrial Trade Committee Meeting, 17-19 October, 2000. FAI Data for Indian Plants.
Note: 1. Gas based Ammonia Plants in India have designed capacity in the range of 900
TPD to 13500 TPD and of 1975 to 1998 vintage. 2. Chinese Gas based Ammonia Plants have capacity of 1000 TPD and vintage of
around 1990. 3. Naphtha based Ammonia Plants in India have designed capacity in the range of
415 TPD to 1350 TPD and of 1969 to 1999 vintage. 4. Chinese Naphtha based Ammonia Plants have capacity of 1000 TPD and
vintage of around 1980.
Table 5: Feedstockwise Energy Data of Indian and Chinese Urea Plants (1999-2000)
Indian Plants Chinese Plants
Feedstock Avg.Energy Consumption (mkCal/MT)
Derived Avg. Energy of Urea Plants based on Chinese Ammonia Plants (mkCal/MT)
Gas 6.10* 6.29
Naphtha 6.43 6.76
* Excluding HFC, Namrup-III, Trombay-V & GSFC, Baroda which are either mixed
feed or small size plants.
Table 6: Comparison of Energy Consumption of World Ammonia Plants (1996-97)
Plants Average Energy (mkCal/MT)
25% Most Energy Efficient Plants in India 8.41
25% Most Energy Efficient Plants in the World
8.49
Source: Ved Gupta and Brennan Borserio, “Retrofit Experiences with a 32 year old Ammonia
Plant” – Ammonia Plant Safety & Related Facilities, vol.42, AIChE-2002. FAI Data for Indian Plants.
Note: Energy Consumption for Urea Plants can be calculated by assuming the following: Ammonia Consumption per MT Urea = 0.58 MT Utility Consumption in Urea Plants, New = 1.2mkCal/MT urea Old = 1.5mkCal/Mturea
Table7: Comparison of Energy Consumption of World Urea Plants (1996-97)
Plants Average Energy (mkCal/MT)
25% Most Energy Efficient Plants in India 6.06
25% * Most Energy Efficient Plants in the World
6.22
* Derived from Ammonia Plant Energy consumption Data.
…