Page 146 - CW E-Magazine (27-2-2024)

Fertilisers Hydrocarbons

LEVERAGING SYNERGIES GROWING ENERGY DEMAND
Mangalore Chemicals to merge with Paradeep Phosphate India’s oil & gas import bill likely to double

Mangalore Chemicals & Fertilisers Ltd., a joint venture between Zuari Agro regions of India, while PPL has a in 15 years: PPAC
Ltd. (MCFL) has announced a merger Chemicals Ltd. and the OCP Group S.A. presence in the northern, central and
with Paradeep Phosphates Ltd. (PPL) eastern parts of India, making the pro- India’s primary energy demand, India already spends more than The recovery factor is a measure
to become one of the largest integrated Once the merger deal is effective, posed combined entity a pan-Indian ferti- which is projected to almost double $160-bn of foreign exchange every of how large a proportion of resources
private sector fertiliser companies in all shareholders of MCFL will be liser company,” the companies stated. to 38.5-mn barrels of oil equivalent year on energy imports, according to originally in place can be recovered.
India. The board of directors of MCFL issued shares of PPL in the ratio of MCFL is one of the largest manufactu- per day (mboe/d) by 2045, will see the government statistics. “The import bill Domestic oil and gas companies can
and PPL, at their board meetings on 187 equity shares of PPL for every 100 rers of chemical fertilisers in Karnataka, growth percentage of renewables be- is likely to double in the next 15 years partner with strategic international in-
February 14, approved a composite equity shares of MCFL. The new shares while PPL is one of India’s leading ing the highest at 11.5%. However, the without steps to reduce this import vestors that want to access the coun-
scheme of arrangement for the merger of PPL so issued to the shareholders private players in phosphatic fertilisers. share of oil- and coal-based power will dependence. Higher imports will put a try’s growing domestic energy market,
of MCFL with and into PPL, marking of MCFL will be listed on both the remain at the top at 30.1% and 33.2%, further burden on government fi nances,” which will give further impetus to the
a strategic move of consolidation for National Stock Exchange of India Limi- MCFL and PPL have formed a respectively, as per a report by the the report said. Crude oil and pro- domestic oil and gas sector, the report
both companies. ted and the BSE Limited. The composite “merger implementation committee” to Petroleum Planning and Analysis Cell ducts import bill till December of FY24 said.
scheme of arrangement also contem- oversee the merger process, including (PPAC). stands at $115.69-bn, as per the PPAC
“MCFL and PPL have consistently plates a transfer of shares of MCFL discussions with regulators, a smooth data. Coal demand to rise
delivered robust fi nancial performances from Zuari Agro Chemicals Ltd. to transition for employees, customers, “While demand for all energy Furthermore, the report has pro-
and by combining, they aim to amplify Zuari Maroc Phosphates Pvt. Ltd. as an vendors and other external stakehol- sources will increase during this period, Limited impact of MNC interests jected energy consumption of the
shareholder value. The proposed com- integral part of the scheme of arrange- ders. Mr. Suresh Krishnan, Managing oil will account for the largest part of Moreover, the renewed interest in country through coal-based sources at
bined entity will become one of the ment. Director & CEO of PPL said, “We will be the growth as the country’s demand for the country’s exploration and produc- 12.8-mboe/d in 2045.
largest integrated private sector fertiliser able to reap the benefi ts of economies oil products will more than double from tion fi eld from international oil and
companies in India, with a total manu- The joint statement said the pro- of scale, optimise product mix, enhance 5.1 mboe/d in 2022 to 11.6 mboe/d in gas companies is likely to have only a The country’s coal demand is
facturing capacity of 3.6-mtpa,” the posed merger aims at taking their res- distribution reach and supply chain 2045,” the report said. limited impact as these companies are expected to increase, but register a
companies told the stock exchanges. pective businesses to the next level capabilities and leverage on each other seen reducing their investments in the slower growth rate after the fi rst part
of growth by consolidating the busi- potent synergies.” The country’s oil consumption is oil and gas sector while transitioning to of the outlook period at just 1.9%.
The deal, fi rst announced on Feb- ness operations to become a larger likely to jump to 305-mn tonne of oil green energy. With limited investments The reason for coal’s slowing pace is
ruary 7, was anticipated as Zuari Agro entity. The merger is subject to the Mr. Nitin Kantak, whole-time equivalent (mtoe) in 2030 from 210- and no major discoveries, the oil & gas the faster deployment of other energy
Chemicals Ltd., the promotor entity approval of the National Company Law Director of MCFL added, “The pro- mtoe in 2020, as per S&P Global Com- sector remains under the shadow. resources, especially gas, nuclear
of both the companies, was looking to Tribunal(s), shareholders and creditors posed merger will enable us to become modity Insights. Gas consumption will and other renewables, said the report.
reorganise the assets of the promotor of MCFL and PPL, and the Competi- a larger player and will help us to serve register a rise to 70-mtoe in the same As per the report, average recovery The imports of coal will continue
groups for quite some time. Zuari Agro tion Commission of India. our market in a more diversifi ed manner period against 53-mtoe in 2020. As factors in the country are 20-30%, to remain at around 25% with more
had bought MCFL in 2015, while PPL is and will result in enhanced value crea- domestic supplies remain limited, the compared with the global average of domestic capacity coming online.
owned by Zuari Maroc Phosphates Pvt. “MCFL has a presence in the southern tion for all the stakeholders.” country’s oil imports will exceed 90% 35-40%. “The application of new The contribution of renewables (solar
Govt. provided nearly Rs. 1.71-lakh-crore as fertiliser of demand by 2030 at 280-mtoe and gas technologies, including digital tech, and wind) to the primary energy
imports are projected to surpass 60% of machine learning and data analytics, requirements is estimated to increase
subsidy till Jan in 2023-24 supplies at 44-mtoe, as per the PPAC provides a further impetus to focus on from 0.3-mboe/d in 2022 to almost
improving recovery factors.”
data.
4-mboe/d in 2045.
The Government has provided nearly and Potassic (P&K) fertilisers. Under the who buy these fertilisers gets bene- DEMAND TRENDS
Rs. 1.71-lakh-crore as fertilisers subsidy policy, a fi xed amount of subsidy, decided fits of subsidy,” Mr. Khuba said.
till January in this fi scal year, Parliament on annual/semi-annual basis, is provided On urea, the Minister said urea is provided Oil products demand surges in January, led by LPG
was informed recently. In a written reply on notifi ed P&K fertilisers depending on to the farmers at a statutorily notifi ed
to Lok Sabha, Minister of State for Chemi- their nutrient content. “Under this policy, MRP. In a separate reply, Mr. Khuba and gasoline
cals and Fertilisers, Mr. Bhagwanth Khuba MRP (maximum retail price) is fi xed informed that the expenditure incurred
said, “the subsidy provided for fertilisers by fertiliser companies as per market on subsidy on fertilisers for the last India’s demand for oil products report by S&P Global Commodity leum Gas (LPG) and gasoline recording
in the country for the year 2023-24 (as of dynamics at reasonable level which is fi ve years stood at Rs. 73,435.21-crore saw a significant increase in Janu- Insights. the highest growth due to increased
January 31, 2024) is Rs. 1,70,923-crore”. monitored by the government. in 2018-19, Rs. 83,466.51-crore in ary, with a jump of 398,000 barrels heating requirements and improved
The Government has implemented Nutri- 2019-20, Rs.131,229.50-crore in 2020-21, per day (b/d) or 8.2% year-on-year, The increase was driven primarily mobility following the year-end holidays.
ent Based Subsidy (NBS) policy with Accordingly, any farmer of India Rs. 157,640.63-crore in 2021-22 and and a modest rise of 8,000 b/d from by higher consumption of all products
effect from April 1, 2010, for Phosphatic including poor and marginal farmers Rs. 254,798.88-crore during 2022-23. the previous month, according to a except fuel oil, with Liquefi ed Petro- Despite the overall rise, jet fuel

146 Chemical Weekly February 27, 2024 Chemical Weekly February 27, 2024 147

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