Engro Looks Abroad to solve Gas Crises

[NiceFarmer]

Gas crisis solution: As govt goes back on its word, Engro looks abroad​

By Farooq Tirmizi​

What does a company do if it has made a $1.1 billion leveraged bet on a fertiliser manufacturing business that relies on a government that consistently goes back on its word? For the Engro Corporation, it involves exploring the import of its feedstock from abroad, as well as the possibility that it may sell its principal product – urea – to Indian farmers instead of their Pakistani counterparts.

“If the Pakistan farmer pays world market prices, we [Engro] can afford to produce urea using LNG [liquefied natural gas] as our feedstock,” said Asad Umar, the CEO of Engro Corporation, in an interview with The Express Tribune. “However, the government will probably not let us sell to them at those prices, so we can simply export our product to Haryana and Punjab in India.”

Engro owns what is currently the largest single-train urea manufacturing facility in the world, based in Daharki, Sindh. It relies on natural gas as the raw material for its production and has a sovereign guarantee issued by the government of Pakistan that the state-owned Sui Northern Gas Pipelines would provide an uninterrupted supply of 100 million cubic feet per day (mmcfd).

Despite rulings from the Sindh High Court that it must live up to its contractual obligations, SNGP has not been able to provide the gas that Engro needs, most recently informing the company on Friday morning that it would be indefinitely shutting off gas to the Dharki plant for the winter.

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[longbrained]

This is why we need Iran gas pipeline built as soon as possible. Our farmers are poor and can not cough up high prices for fertilizers and pesticides which will make them even poorer and the food prices higher. Natural gas is the raw material for both these products without which no modern high yield agriculture is possible. Pakistan is an agricultural country and we need to protect this most important sector. Pakistan should reject US pressures and hold its national interests supreme.

 

[Nothing]

Even Iran is selling gas at international prices.. they are not giving any discount on it ...

for fertilizer you need local production of gas... otherwise things can go worst in agri country like ours

 

[NiceFarmer]

But for iran shipping is Via pipelines which is obviously cheaper

Even Iran is selling gas at international prices.. they are not giving any discount on it ...

for fertilizer you need local production of gas... otherwise things can go worst in agri country like ours

 

[ajpirzada]

Even Iran is selling gas at international prices.. they are not giving any discount on it ...

for fertilizer you need local production of gas... otherwise things can go worst in agri country like ours

why do u need local production of gas???

 

[Safriz]

large CNG carrying ships can be chartered and countries like algeria give good price for bulk export of their gas.
the only problem is if pakistan has ports that have fascility to discharge gas cargo?
i remember divan salman used to buy LPG from oman and had a little gas carrying ship of their own coming to karachi every other week..
but for cost effective import.....arge ship will be needed and infrastructure to offload.

www.timrileylaw.com/LNG.ht3.jpg

 

[Nothing]

why do u need local production of gas???

If you want to provide subsidy/or control price for fertilizer (produce by private company).. government has to provide them with cheaper gas , which one can achieve with in house production where government can sell it to price suitable to them.
If any private company will import gas for fertilizer , it will gonna be costly and if home country is restricting prices they are bound to export it.. issue is controlling price of fertilizer with government mechanism .. for private company

 

[BATMAN]

Zardari will eventually kill all industry of Pakistan.

 

[Musalman]

"Nothing" is absolutely right. You need to subsidize gas to fertilizer sector and as per fertilizer policy were subsidizing them. Import gas will increase the subsidy margin which will be difficult for other consumer to accommodate.

BTW LNG option and Iran option are underway. Let see what happens

---------- Post added at 09:02 AM ---------- Previous post was at 09:01 AM ----------

Zardari will eventually kill all industry of Pakistan.

Not every thing is Zaradri fault. uneconomical development was done in Mushraff time which destroyed the whole industry

---------- Post added at 09:03 AM ---------- Previous post was at 09:02 AM ----------

Just for record I am no fan of Zardari

 

[kill_me]

we need to develop a policy that impoted CNG is for transport and domestic use and local production is for industry and ffurther more CNG should be banned for vehicals >1.1L .......

and guys please dont use gas heaters in your houses and for water heating replace conventional geysers with instant heaters....... do you bit for saving pakistans industry