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India’s public sector entities National Fertilisers Ltd, Engineers India Ltd and Fertiliser Corporation of India Ltd have signed an agreement to form a joint venture company for setting up new ammonia and urea plants at the existing site of the Ramagundam Fertiliser Plant in Karim Nagar district in the newly formed state of Telangana in South India.

The new company is called Ramagundam Fertilisers and Chemicals Ltd and the two new plants will have 2,200 tpd and 3,850 tpd capacity, respectively.

As per the joint venture agreement, NFL will provide marketing services to the joint venture company and EIL will provide engineering, procurement, construction and management consultancy services for the project.

The revived plant will help increase indigenous urea production in India and will be a step forward in making the country self-reliant in terms of urea requirements. The plant having a capacity of 1.27 million tpa of urea will be based on natural gas as feedstock. Natural gas for the plant will come from the proposed Mallavaram-Bhilwara pipeline and raw water will be fed from Sripada Yellampally Barrage on Godavari river.

The project is estimated to cost Rs.5,000 crore, which is being funded in a debt-equity ratio of 70:30. While NFL and EIL are contributing equity of 26 per cent each, FCIL will be contributing 11 per cent. The balance equity is in the process of being tied up. The project is targeted to be completed in 2018.

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