India’s Deepak Fertilisers and Petrochemicals Corp. (DFPC) plans to set up a 510,000 mt/y ammonia plant at its Taloja production site in Maharashtra state. The company expects the plant to be mechanically complete in the fourth quarter of FY2023 (April 1-March 31).
DFPC currently imports most of its ammonia requirements, mostly from the Middle East, yet some 68-70 percent of the group’s consolidated turnover depends on ammonia as a key raw material, the company said in a FY2021 earnings presentation on May 30.
In addition to providing greater margin stability for the company by mitigating the impact of volatile ammonia pricing, the new plant will enable logistics savings of $75-$90/mt for downstream products, DFPC said.
Some 70 percent of the project’s production capacity has “in-house ready demand” at Taloja, thus no offtake risk, the company said.
DFPC also highlighted long term LNG/gas pricing is in a favourable phase to help lower key raw material cost.
The cost of the ammonia plant is put at INR14.75 billion (approximately $202 million at current exchange rates). Land for the project has been acquired, and the company said it has received the Consent to Establish (CTE) the plant.
“Logistics cost saving, along with fiscal benefits granted by state government for the project tantamount to $3.00-$4.00/mmBtu saving in landed price of natural gas, make it a globally competitive ammonia project,” said DFPC.
The company also plans to establish a new TAN plant at Gopalpur in Odisha state on India’s East Coast. The plant will have production capacity for 377,000 mt/y of TAN and is expected to be completed in the fourth quarter of FY2024.
In its earnings presentation, DFPC said production capacity at its existing TAN plant at Taloja is insufficient to meet the demand-supply gap given high-capacity utilization, and the proposed new plant will be “strategically located near the major mining hubs to capture domestic demands, and the Gopalpur port for export opportunities.”
It said regulatory approvals for the project are in advanced stages, and that it has a finalized equipment supplier and EPC contractor in place.
DFPC produced 427,800 mt of TAN in FY2021, down slightly on FY2020’s 436,200 mt due to COVID-related restrictions. The company put its existing market share of India’s TAN market at approximately 42 percent out of a total TAN market of 1,050,000 mt/y.