New Delhi: India has revived its plan to set up a fertiliser plant in Iran with an investment of about Rs 5,000 crore and has asked the Persian gulf nation to offer long term gas contract for manufacturing the soil nutrient.
India had nominated Rashtriya Chemicals and Fertilisers (RCF), Gujarat Narmada Valley Fertilisers & Chemicals (GNFC) and Gujarat State Fertilisers Corporation (GSFC) for the proposed 1.3 million tonne urea joint venture plant. The project would also include an Iranian firm, a source said.
"The plan is to set up a urea joint venture plant at Chahbahar in Iran, using natural gas as feedstock which is abundant in the country. Indian government officials have conveyed to the Iranian authorities that they are looking for long-term gas contract at feasible rates for producing urea," the source said.
Both nations have been talking to each other since 2013, for setting up of a fertiliser plant in the Persian gulf nation, but talks were stuck over gas price issue.
India has now revived its plans after Iranian authorities approached the government officials and expressed willingness to partner with them in this project, the source added.
Recently, Ambassador of Iran Gholamreza Ansari called on Fertiliser Minister Ananth Kumar to discuss about the cooperation between two countries and India's plans to set up urea-ammonia plant there.
The proposed urea joint venture plant in Iran would be on the lines of OMIFCO (Oman India Fertiliser Company) in Oman, where the Indian entities have jointly invested in urea manufacturing with local player.
OMIFCO is owned 50 percent by the Oman Oil Company SAOC, 25 percent each by the IFFCO and KRIBHCO. The Indian government has a long term off-take arrangement with OMIFCO for sourcing urea, which is produced at lower rates compared to domestic cost of production.
India's annual demand of urea is about 30 million tonnes, while the domestic production is around 22 million tonnes, the rest is met through imports.