DH Fertilizers Limited

Ammonia Storage and Filling Facility

ObjectiveSetting up of ammonia storage and filling facility in Karachi to cater the customers in Southern region

• Filling of Small Ammonia Cylinders @ 22 Kgs - 70 Kgs Capacity

• Filling of large sized Cylinders @ 450 Kgs Capacity

• Filling of Bowzers @ 5 MT – 20 MT capacity• Direct supply of ammonia from DHFL to

customers (to be finalized)• Import and supply of Ammonia in case of

ammonia shortage• Cylinder Testing Facility• Aqua Ammonia supply (in future; not accounted

for in proposal)

Types of Services

Market Study

Ammonia Sales 2012 and 2013

Ammonia Sales in M.Tons

2012 2013

Anhydrous

AquaAnhydrou

s Aqua

Overall 2176 2140 3616 2191

Sindh 706 945 1013 937

DHFL Sales Mtons

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Total

Retail Mode

HYDERABAD 6 0 15 25 20 10 6 21 0 0 104

JAFFARABAD 5 0 7 0 5 3 2 0 5 0 26

KARACHI 15 18 41 24 43 17 32 29 25 21 265

LARKANA 0 0 0 0 5 3 1 0 0 0 9

SUKKAR 31 0 3 10 23 17 0 0 0 0 84

Sub Total 57 18 66 60 97 50 41 50 29 21 488

Bulk Mode

KARACHI 24 46 92 68 44 49 45 50 44 64 525

Total Anhydrous Ammonia Sales 81 64 158 128 141 99 85 99 73 84 1013

Aqua Ammonia

KARACHI 60 90 32 89 76 112 168 83 112 115 937

Major Bulk Ammonia Customers

S No Name No. of Tanker Capacity Tons Expected Ammonia Demand, M. Tons /

Year

1

Kamal International Services (Supplies to Pakistan Steel & other industry)

1 22 50

2 International Steels Ltd 1 (Hired Tanker) 22 490

S No Name No. of Tankers Capacity Tons Expected Ammonia Demand, Mton per

Year

1Kamal International Services (Supplies to various industry)

1 (Hired Tanker) 30 260

2Shahzad Traders(Supplies to various industry)

1 (Hired Tanker)30 824

- Anhydrous

- Aqua

Potential Market in South Region

S No

NameExisting

Customers MTon / Year

Competitors Sales,

MTon / Year

Total Sales Expected,

MTon / Year

1 Retail 488 350 838

2 Bulk 525 120 645

Total* Jan-Oct (annual)

1013* (1216) (470)1483

(1686)

Ammonia Storage Capacity at Site

• Ammonia Supply to South Region (DHFL plus Competitors) = 1700 MT per annum

• Max. Supply from DHFL = 158 MT in March • Estimated Demand per day = 6 MT• Proposed ammonia storage capacity (9 days) = 54 MT • Different Storage Options (at 55 oC)

• One storage tank of 55 MT (100 m3) – Landed cost: Rs. 14.6 Million

• Three storage tanks of 22 MT (40 m3); • cost of three 22 MT tanks: Rs. 18.3 Million• Flexibility of starting with one storage tank and increase in

multiple of 22 MT.

• Four ISO tanks of 13 MT (24 m3)• Landed cost Rs. 18.4 Million• Flexibility of increase by multiple of 13 MT• Same ISO tanks can be used for import of ammonia.

• Relevant Information: At DHFL cylinder filling capacity per day is around 450 small cylinders and 2-3 bowzers of 22 MT.

Different optionsOption 1

Install 1 x 55 MT ammonia storage

tanks

Dedicated 1 ammonia road tanker

@ 20 MT capacity; ammonia

loading from DHFL and unloading

in storage tanks.

Cylinder/bowzers filling

Cylinder Testing

Install 3 x 22 MT Storage Tanks

Dedicated 1 ammonia road tanker @ 20 MT

capacity; ammonia loading from DHFL and

unloading in storage tanks.

Cylinder/bowzers filling

Cylinder Testing

Option 2

Different optionsOption 3

Install 4 x 13 MT ISO tanks

Dedicated 1 ammonia road tanker

@ 20 MT capacity; ammonia

loading from DHFL and unloading

in storage tanks.

If tanker to be used for overseas

ammonia transportation. (Risk

due to frequent rigging;

specialized rigging requirement)

Cylinder/bowzers filling

Cylinder Testing

Different Options (Continued) Option 4

Import of ammonia in 60 Kg cylinders (90

cylinders in 20 ft container) by sea

Quote from M/s SOC

Empty cylinder price @ $ 245 per

cylinder; to be purchased for refilling.

Gas price $ 1600 per MT

CNF price of consignment US $ 32000

(for 5.4 MT) for 90 cylinders

Option 5 Import of Ammonia in ISO tanks from

M/s Sharjah Oxygen Company UAE

Unloading in Storage Tank at site.

As per quotation from M/s Sharjah Oxygen Company UAE :

Supply of ammonia by sea in ISO tanks @ 12 MT capacity- CNF Karachi price of US $ 1400 per Ton.

A refundable cash deposit of US $ 40000 per tank.

Tank on 5 days free rental basis, after 6th day rent $ 50 per day.

Different Options (Continued)

Option 6 DH to provide storage facility of 55 MT at site

DH arrange hired lorry for transport of ammonia 20 tons from plants site Private party

• Establish and operate proper filling site at jointly agreed location at their cost.• Provide bank guarantee as security of product stored in the storage tanks at site by DH.• Sell ammonia in cylinders and bulk from the site in the allocated territory.

Specs Bharat Tanks, India

CIMC, China

Ravi Green, Pakistan

Fouz Engg, Pakistan

1 × 100 m3 (55 MTon) Ammonia Storage Vesselw/o GST

Rs. 12 million (CNF Karachi) – Landed Cost = Rs. 15.6 million*

Rs. 11.21 million (CNF Karachi) – Landed Cost = Rs. 14.6 million

Rs. 15.2 million (Ex works LHR) without instruments

Rs. 15.5 million (Ex works LHR)without instruments

1 × 40 m3 (22 MTon) Ammonia Storage Vesselw/o GST

Rs. 5.85 million (CNF Karachi) – Landed Cost = Rs. 7.6 million*

Rs. 4.8 million (CNF Karachi) – Landed Cost = Rs. 6.1 million

Rs. 7.5 million (Ex works LHR) without instruments

Rs. 7.5 million (Ex works LHR) without instruments

1 × 24 m3 (13 MTon) Ammonia Storage Vesselw/o GST

Rs. 3.6 million (CNF Karachi) – Landed Cost = Rs. 4.6 million (ISO)

Rs. 4.9 million (Ex works LHR)(Storage Tank) without instruments

Rs. 4.4 million (Ex works LHR)(Storage Tank) without instruments

* Design pressure is 265 psig while for other vendors it is 400 psig

Sr. No.

Item

Cost, Million Rs.

Option 11 x 55 MT

(Total 55 MT)

Option 2 3 x 22 MT (Total 66

MT)

Option 34 x 13 MT (Total 52

MT)

Option 61 x 55 MT (Total 55

MT) 1 Storage tanks (M/s CIMC China) 14.6 18.3 18.4 14.6

2 Unloading/loading system for bowzers including pump/compressor 8.0 8.0 12 (incl O/H

crane) 8.0

3 Cylinders filling system including pump, piping, valves, 2 PCVs etc 18.2 18.2 18.2 2.0 4 Electrical Installations (cables, swtich gears, MCC) 4.0 4.0 4.0 1.5

5 Bowzer for transport (1 in number) 6.1 6.1 6.1 6.1

6 Instrument Air Compressor (Oil free compressor) 2.0 2.0 2.0 -

7 Cylinders testing facility similar to the existing setup at DHFL 1.5 1.5 1.5

- (Third Party should arrange testing)

8Area required (16 Kanal) @ Rs. 1 Million / Kanal and location selection for system installation 16.0 16.0 16.0 -

9

Civil construction including

15.0 15.0 15.0

3.5 dyke foundation for storage tanks,ramp for cylinders unloading / loading,

- Water Tankshed and pad for cylinder storage

10 Offices, Operator Rooms, Store, Secuity Office, Canteen, Toilets etc. 7.0 7.0 7.0 1.0 11 Water Cooler & Service Water 1.0 1.0 1.0 - 12 Office Appliances 2.0 2.0 2.0 0.5 13 Material / Procurement Transport Van 3.5 3.5 3.5 - 14 Emergency Power generator (60 kW) 2.0 2.0 2.0 - 15 Emergency response plan, PPEs, eye wash & showers, foam suppression system 1.7 1.7 1.7 1.7 16 Weighing bridge (30 MT) 2.5 2.5 2.5 2.5

17

Approvals required

1.0 1.0 1.0 1.0          EPA          Explosive department         Other ??

18 Operation, Lab, Maintenance and Sales staff        Sub Total 106.1 109.8 113.9 42.4Contingencies (5 %) 5.3 5.5 5.7 2.1

Total 111 115 120 45

Operating Cost (Options 1,2 & 3) 1. Utilities Cost = = Rs 0.422 million per month

• 16 hours Working (2 eight hours shifts) • Power from WAPDA = Rs 0.134 million per month• Power from Emergency Generator = Rs 0.288 million per

month• Total Cost - Rs 0.422 million per month

2. Manpower Cost = Rs 0.620 million per month• Site Manager / Incharge = 1 Rs. 100,000• Office Supervisor = 1 Rs. 30,000• Sales, Procurement & Accounts = 1 Rs. 50,000• Security Staff = to be decided• Cylinder / Tanker Filling• Operators = 4 per shift Rs. 200,000• Maintenance

• Electrician = 1 Rs. 25,000• Pipe fitter = 2 Rs. 50,000• Millwright = 1 Rs. 25,000• Supervisor = 1 Rs. 40,000• Crane operator = 1 Rs. 35,000

• Helpers = as required• Cylinder Testing• Pipe fitter = 2 Rs. 50,000• Painter = 1 Rs. 15,000• Helpers = as required

Financial Model

Approvals

• EPA

• Explosives department

• Ministry of Interior / Trade

• Others (Rescue Department / Civil Defense / Fire Fighting) ??

• The various options have been studied for setting up of Ammonia storage and filling facility including operation and maintenance.

• Cost estimation has been done based on quotes from renowned foreign and local firms. However, the acquisition of land and approvals from relevant agencies may be arranged accordingly.

• Storage capacity of 55 MTon has been determined as per market demand. The capacity may be enhanced depending on the market situation in future.

Major Milestones

• Feasibility Study

• Approvals from GOP: Explosive department; IEE (EPA), Other approvals required to be ascertained. In case of ammonia import, as per Ministry of Commerce no license is required.

• Land Acquisition : Away from residential and populated industrial area. For site selection, separate study is required.

• Civil Construction

• Procurement of Equipment/machinery/Customs clearances

• Mobilization of Manpower

• Ammonia Transportation from DHFL to site; to be outsourced

• Installation phase

• Commissioning

• Operation & maintenance

• Safety and Security Requirements

• Sale/Marketing

Conclusion

• It is imperative to install storage and filling facility in Southern area to sustain and improve our ammonia market share.

• Storage capacity of 55 MTon has been determined as per market demand. The capacity may be enhanced depending on the market situation in future.

• After in depth analysis of proposals from renowned local, Indian and Chinese vendors, the storage tanks are recommended to be purchased from China (M/s CIMC) whereas pumps and compressors would be of US / European origin.

• Ammonia Transportation would be outsourced.

Conclusion

• DHFL has the requisite capability to set up and operate ammonia storage, filling and testing facility.

• However, due to current situation, a private party may be considered for setting up the filling and testing facility including O&M.

• Ammonia can be imported from Middle East or other countries in case of shortage or when international prices are low.

• Delivery Time for the Tanks from China is “120 days ex-works ready after 30% Down payment receipt”.