FERTILIZERS

CONTENTS

1.INTRODUCTION

2.MAP

3.RAW MATERIALSNitrogen

Ammonia

Urea

Phosphorus

Phosphoric Acid

Potassium

4.MULTI-NUTRIENT PRODUCTIONPhosphate Fertilizers

Nitrogen Fertilizers

Potash Fertilizers

Multi-nutrient Fertilizers

5.ENERGY USE

6.FERTILIZER PROCESS

7.DETAILLED PROCESS

8.GROWTH

9.DEVELOPMENT OF INDUSTRYCapacity Build-Up

Production capacity and capacity utilization

Strategy for Growth

10.DOMESTIC PROJECTSPolicy Environment

11.TECHNOLOGIGAL ADVANCEMENTS

12.IT in Fertiliser

13.Role Of NIC

15.JOINT VENTURES Joint Venture Oman India Fertilizer Company, Oman (OMIFCO):

ICSJV with Jordan

JV(Morocco)

16.JOINT VENTURES (Under consideration)JV in UAE

JV(Egypt)

JV(Tunisia)

JV(Jordan)

17.CONCESSIONS/INCENTIVES

18.IMPACT OF BUDGET

20.DEMAND & SUPPLYProduction,Import & Consumption

Distribution Of Fertiliser In INDIA

Demands- Nitrogen

Demands- Phospates

Forecast

Imported Materials

18.COMPANIESPublicSector Undertakings

Cooperative Sector

Joint Sector Undertaking

Stilltofinish

MARKETING & CONSUMERS

RANKINGS

ANALYSIS

CONCLUSION

1.Introduction

Fertiliser is generally defined as "any material, organic or inorganic, natural or synthetic, which supplies one or more of the chemical elements required for the plant growth"

Chemical fertilizers have played a vital role in the success of India's green revolution and consequent self-reliance in food-grain production. The increase in fertilizer consumption has contributed significantly to sustainable production of food grains in the country. The Government of India has been consistently pursuing policies conducive to increased availability and consumption of fertilizers in the country

The Indian Fertilizer industry had a very humble beginning in 1906, when the first manufacturing unit of Single Super Phosphate (SSP) was set up in Ranipet near Chennai with an annual capacity of 6000 MT. The Fertilizer & Chemicals Travancore of India Ltd. (FACT) at Cochin in Kerala and the Fertilizers Corporation of India (FCI) in Sindri in Bihar were the first large sized -fertilizer plants set up in the forties and fifties with a view to establish an industrial base to achieve self-sufficiency in foodgrains. Subsequently, green revolution in the late sixties gave an impetus to the growth of fertilizer industry in India. The seventies and eighties then witnessed a significant addition to the fertilizer production capacity.

Financial year 2007-08 has seen unprecedented growth in the demand for fertilizers. The demand projected by DAC for the Kharif 2007season was for 131.68 lakh MT of urea, 40.08 lakh MT of DAP and 16.52 lakh MT of MOP. The demand was met fully and sales of 124.58 lakh MT of Urea, 36.14 lakh MT of DAP and 14.17 lakh MT of MOP were registered. Similarly, for the Rabi season of 2007-08, the demand projected by DAC was for 140.02 lakh MT of Urea, 49.13 lakh MT of DAP and 19.61 lakh MT of MOP. As per the current trends, the sale is likely to be 126.60 lakh MT of Urea, 41.59 lakh MT of DAP and 14.48 lakh MT of MOP.

Fertilizer is a key ingredient in ensuring the food security of the country by increasing the production and productivity of the soil. The domestic food grain production target has been set at 320 million tonnes by 2011-12 from the present production of 210 million tonnes. This target could be achieved by higher productivity through improved farming practices, expansion of irrigation, better seeds and extensive and balanced use of fertilizers.

Towards this end, the Department is planning to raise the production of urea from the present installed capacity of 197 LMT to 300 LMT by the end of 11th Five Year Plan i.e., 2011-12 by taking concrete steps to boost production and productivity, removing regional imbalances in production and distribution, securing long term tie-ups for supply of feedstock and raw material etc.

2.MAP

3.Raw Materials

Domestic raw materials are available only for nitrogenous fertilizers. For the production ofurea and other ammonia based fertilizers methane presents the major input which is gainedfrom natural gas/associated gas, naphtha, fuel oil, low sulfur heavy stock (LSHS) andcoal. In the more recent past, production has more and more switched over to the use ofnatural gas, associated gas and naphtha as feedstock. Out of these, gas is most hydrogenrich and easiest to process due to its light weight and fair abundance within the country.However, demand for gas is quite competitive since it serves as a major input to electricitygeneration and provides the preferred fuel input to many other industrial processes.

For production of phosphatic fertilizer most raw materials have to be imported. India hasno source of elemental sulfur, phosphoric acid and rock phosphate. Yet, some low graderock phosphate is domestically mined and made available to rather small scale single superphosphate fertilizer producers. Sulfur is produced as a by-product by some of thepetroleum and steel industries.

The major raw materials for fertilizer manufacture are hydrocarbon sources (mainly natural gas), sulfur, phosphate rock, potassium salts, micro-nutrients, water and air.

1. Nitrogen

2. Ammonia

3. Urea

4. Phosphorus

5. Phosphoric Acid

6. Potassium

3.1Nitrogen

The main nitrogen fertilizers manufactured include ammonia, urea, ammonium nitrate and sulfate of ammonia.

3.2.Urea

Urea is manufactured by reacting ammonia with the carbon dioxide formed in the production of hydrogen in the first step of the ammonia manufacturing process. Urea contains 46% nitrogen.

3.3.Other nitrogen products

Ammonium sulfate (21% nitrogen, 24% sulfur) and ammonium nitrate (34% nitrogen) are produced by reacting ammonia with sulfuric and nitric acids, respectively. Ammonium sulfate is also produced as a by-product of a number of manufacturing processes of which nickel refiing is the most important source in Australia.

3.4.Ammonia

Ammonia is the basis for all of the major, manufactured nitrogen fertilizers. The hydrocarbon source provides a source of energy for the production of heat and compression in the manufacturing process as well as hydrogen. Water contributes hydrogen, and air is the source of nitrogen. Ammonia contains 82 % nitrogen.

3.5.Phosphorus

Phosphate rock is the basic material used in all phosphorus fertilizer production. The most important deposits are sedimentary materials, laid down in beds under the ocean and later lifted up into land masses. Almost all phosphate rock is strip mined. It typically contains from 12-17% phosphorus and is usually upgraded for use in fertilizer manufacture. Upgrading removes clay and other impurities. This process is called beneficiation. Following beneficiation, the phosphate rock is finely ground and treated with acid. Sulfuric, phosphoric and nitric acids are used in the production of phosphorus fertilizers.

3.6.Phosphoric acid Phosphate rock is treated with concentrated (90 to 93 %) sulfuric acid to produce a mixture of phosphoric acid and gypsum. Filtration removes the gypsum to leave green, wet-process or merchant grade phosphoric acid containing about 22 % phosphorus

3.7.Potassium Potassium deposits occur as beds of solid salts beneath the earth’s surface and brines in dying lakes and seas. These deposits are mined and then refined by crystallization or flotation.

4.Multi-nutrient ProductionFertilizers are produced as straight or multi-nutrient products, as described in the following sections.

4.1.Nitrogen Fertilizers

The intermediate product in the case of nitrogen (N) fertilizers is ammonia (NH3), which is produced by combining nitrogen extracted from the air with hydrogen from hydrocarbons such as natural gas, naphtha or other (heavier) oil fractions, and hydrogen which is obtained by means of the Steam Reforming Process. Approximately 85% of the anhydrous ammonia plants in the EU use natural gas. Measures to improve production processes have focused on reducing the amount of hydrocarbon feedstock required to produce a tonne of ammonia.

The further processing of ammonia produces straight N fertilizers such as urea, ammonium nitrate and calcium ammonium nitrate, as well as solutions of the above fertilizers and ammonium sulphate. Ammonia is also the main component of many multi-nutrient fertilizers.

4.2.Phosphate Fertilizers

Rock phosphate (27 - 38% P2O5) is the raw material source from which all types of phosphate fertilizers are produced, with the minor exception of basic slag (12 - 18% P2O5), which is a by-product of steel production.

In its unprocessed state, rock phosphate is not suitable for direct application, since the phosphorus (P) it contains is insoluble. To transform the phosphorus into a plant-available form and to obtain a more concentrated product, phosphate rock is processed using sulphuric acid, phosphoric acid and/or nitric acid. Acidulation by means of sulphuric acid produces either phosphoric acid, an intermediate product in the production of triple superphosphate (TSP), MAP, DAP and complex fertilizers, or single superphosphate (SSP). Acidulation using phosphoric acid produces TSP, and acidulation using nitric acid produces NP slurries for use in the manufacture of complex fertilizers.

4.3.Potash Fertilizers

Most potassium (K) is recovered from underground deposits of soluble minerals, in combination with either the chloride or sulphate ion. Although the low-grade, unrefined material can be applied direct, the minerals are normally purified, to remove sodium chloride, and concentrated before use. The resulting potash fertilizers are applied as straight K fertilizers such as potassium chloride and potassium magnesium sulphate or are used in the manufacture of multi-nutrient fertilizers.

4.4.Multi-nutrient Fertilizers

Most multi-nutrient fertilizers produced in the EU are either complex fertilizers, each granule of which contains a uniform ratio of nutrients, or blends. Typically, complex NPK fertilizers are manufactured by producing slurries of ammonium phosphates, to which potassium salts are added prior to granulation or prilling. PK fertilizers, on the other hand, are generally produced as compounds by the steam granulation of superphosphates (SSP or TSP) with potassium salts.

5.Energy Use

Fertilizer production is one of the most energy intensive processes in the Indian industry.Energy is consumed in the form of natural gas, associated gas, naphtha, fuel oil, low sulfurheavy stock and coal. The choice of the feedstock is dependent on the availability offeedstock and the plant location. It is generally assigned to the plants by the government.Production of ammonia has greatest impact on energy use in fertilizer production. Itaccounts for 80% of the energy consumption for nitrogenous fertilizer. The feedstock mixused for ammonia production has changed over the past. Since new capacity in the form ofgas based fertilizer plants was added in the 1980s the share of gas has increasedsubstantially. In 1992-93, the shares of feedstocks in ammonia production were: 54.2%natural gas, 26.1% naphtha, 18.2% fuel oil, and 1.5% coal (TERI, 1996) while, in 1981-82, it was: 52% naphtha, 19% fuel oil, 19% coke oven gas and 10% coal (Kalra, 1989).The shift towards the increased use of natural/associated gas and naphtha is beneficial inthat these feedstocks are more efficient and less polluting than heavy fuels like fuel oil andcoal. Furthermore, capacity utilization in gas based plants is generally higher than in otherplants. Therefore, gas and naphtha present the preferred feedstocks for nitrogenousfertilizer production.

Energy intensity in India’s fertilizer plants has decreased over time. This decrease is due toadvances in process technology and catalysts, better stream sizes of urea plants andincreased capacity utilization. Capacity utilization is important as losses and waste heat areof about the same magnitude no matter how much is actually produced in a plant at aspecific point of time. The evolution of specific energy consumption on average and byfeedstock is shown in Table 2.6. Since ammonia production holds the highest share ofenergy consumption, the numbers given here are for energy intensity in ammonia plants.Actual energy consumption in a plant depends on the age of the technology and the scaleof the plant. For example, a typical ammonia plant established in 1970s would be a 600tpd gas based process with an efficiency of 9.8 to 10.2 Gcal/Mt. A plant established inearly 1990s would consume only 8.0 to 8.5 Gcal/Mt. (Trivedi, 1998)

The production of phosphatic fertilizer requires much less energy than nitrogenousfertilizer. Depending on the fertilizer product, in 1993-94, energy consumption variedfrom negative input for sulfuric acid to around 1.64GJ/tonne of fertilizer for phosphoricacid (TERI, 1996). For sulfuric acid the energy input is negative since more steam (inenergy equivalents) is generated in waste heat boilers than is needed as an input.

6.Fertilizers ProcessAgricultural growth is mainly dependent on advances in farming technologies andincreased use of chemical fertilizers. The fertilizers contain the three basic nutrients foragriculture: nitrogen (N), phosphorous (P) and potassium (K). Nitrogen is primarilyprovided by nitrogenous fertilizers such as urea (46%N) or ammonia fertilizers, e.g.ammonium sulfate (20.6%N). Further shares of nitrogen are contained in complexfertilizers that combine all three plant nutrients (NPK). Phosphate comes in the form ofstraight phosphatic fertilizers such as single super phosphate (16%P2O5) or as part of acomplex fertilizer. Potassic fertilizer is available as straight potassic fertilizer, such asmuriate of potash (60%K2O) or sulfate of potash (50%K2O) or as a complex NPKfertilizer component.

The effectiveness of fertilizers can only be assured if applied in optimal combinationspecific to the local soil and climatic conditions. Nitrogen presents the most essentialnutrient for plant growth holding the biggest share in the optimal mix. The basic rawmaterial for the production of nitrogenous fertilizers is ammonia, for straight phosphaticfertilizers it is phosphate and for potassic fertilizers potash. Out of the three fertilizertypes, production of ammonia is most energy and resources intensive. Its productionprocess is presented in more detail here. The description draws on Phylipsen, Blok andWorrell (1998).

The most important step in producing ammonia (NH3) is the production of hydrogen,which is followed by the reaction between hydrogen and nitrogen. A number of processesare available to produce hydrogen, differing primarily in type of feedstock used.The hydrogen production route predominantly used world wide is steam reforming ofnatural gas. In this process natural gas (CH4) is mixed with water (steam) and air toproduce hydrogen (H2), carbon monoxide (CO) and carbon dioxide (CO2). Waste heat isused for preheating and steam production, and part of the methane is burnt to generate theenergy required to drive the reaction. CO is further converted to CO2 and H2 using thewater gas shift reaction. After CO and CO2 is removed from the gas mixture ammonia(NH3) is obtained by synthesis reaction.

Another route to produce ammonia is through partial oxidation. This process requiresmore energy (up to 40-50% more) and is more expensive than steam reforming. Theadvantage of partial oxidation is a high feedstock flexibility: it can be used for anygaseous, liquid or solid hydrocarbon. In practice partial oxidation can be economicallyviable if used for conversion of relatively cheap raw materials like oil residues or coal. Inthis process air is distilled to produce oxygen for the oxidation step. A mixture containingamong others H2, CO, CO2 and CH4 is formed. After desulfurization CO is converted toCO2 and H2O. CO2 is removed, and the gas mixture is washed with liquid nitrogen(obtained from the distillation of air). The nitrogen removes CO from the gas mixture andsimultaneously provides the nitrogen required for the ammonia synthesis reaction.

A variety of nitrogenous fertilizers can be produced on the base of ammonia. Ammoniacan be used in a reaction with carbon dioxide to produce urea. Ammonia nitrate can beproduced through the combination of ammonia and nitric acid adding further energy inform of steam and electricity. Other fertilizer types produced on the base of ammoniainclude calcium ammonium nitrate (ammonium nitrate mixed with ground dolomite) andNP/NPK compound fertilizers. For the most part further energy is required to induce thenecessary chemical processes.

Phosphatic fertilizers are produced on the basis of phosphoric and sulfuric acids.Phosphoric acid is produced by leaching of phosphate rock with sulfuric acid. Sulfuric acidvery often remains as a waste product of the chemical industry. (Worrell et al., 1994)Potash fertilizers are produced from sylvinite salt. Sylvinite is diluted in a circulation fluidin the flotation process. The potash fertilizer is separated by skimming the solution.

7.Detailled Process

Manufacturing Process – Fertilizer

The basic chemical that is used to produce nitrogenous fertiliser is ‘Ammonia’. More than 80%energy required for making fertiliser products goes into manufacture of ammonia. Almost 82% ofthe nitrogen application in India is in the form of urea and therefore most of the input energy goesto the manufacture of ammonia and urea. In view of this, processes involved in the manufactureof ammonia and urea are reviewed here.

7.1.Ammonia Production Process

Ammonia is produced basically from water, air and energy. The energy source is usuallyhydrocarbon that provides hydrogen for fixing the nitrogen. The other energy input required issteam and power. This can be through coal or petroleum products or purchased power from autility company.

Steam reformation process of light hydrocarbon particularly Natural Gas (NG) is the mostefficient route for the production of ammonia. The other routes are the partial oxidation of heavyoils if the available feedstock is residual heavy oil from a refinery. Coal has also been used toproduce ammonia. The following is an approximate comparison of the energy consumption, costof production and the capital cost of the plants for three the feedstocks.

Natural Gas Heavy Oil CoalEnergy consumption 1.0 1.3 1.7Investment cost 1.0 1.4 2.4Production cost 1.0 1.2 1.7

Natural gas is therefore the most appropriate source of feedstock on all the three accounts.Based on the known resources of fossil raw materials and economy of use on all accounts, it islikely that natural gas will dominate as feedstock for ammonia production in the foreseeablefuture. Coal may become a competing feedstock if the prices of natural gas and petroleumproducts go very high due to depleting resources.For the present time and near future, the steam/air reforming concept based on natural gas isconsidered to be the most dominating and best available technique for production of ammonia.

The reforming process can be divided in to the following types:

7.1.1. Conventional steam reforming with fired primary reformer and stoichiometric airsecondary reforming (stoichiometric H/N- ratio)

7.1.2 Steam reforming with mild conditions in fired primary reformer and excess air insecondary reformer (Under-stoichiometric H/N ratio)

7.1.3 Heat exchange auto thermal reforming, with a process gas heated steam reformer (heatexchange reformer) and a separate secondary reformer, or in a combined auto thermal reformerusing excess or enriched air (under- stoichiometric or stoichiometric H/N-ratio)All the three reforming versions are in use but the conventional one is the oldest and most in use.

7.1.4 Conventional Steam Reforming:Overall conversionThe theoretical process conversions, based on methane feedstock, are given in the followingapproximate formulae:

0.88CH4 + 1.26 Air + 1.24 H2O ¾® 0.88CO2 + N2 + 3H2

N2 + 3H2¾® 2NH3

The synthesis gas production and purification normally takes place at 25 to 35 kg/cm2 pressure.The ammonia synthesis pressure is in the range of 100-250 kg/cm2. The block diagram of thesteam/ air reforming is as under (Figure 1).

Diagram of Steam/Air Reforming Process.

7.2.Feedstock desulphurisation

This part of the process is to remove the sulphur from the feedstock over a Zinc oxide catalystbed,as sulphur is poison to the catalysts used in the subsequent processed. The sulphur level isreduced to less than 0.1 ppm in this part of the process.

7.3.Primary reforming

The gas from the desulphuriser is mixed with process steam, usually coming from an extractionturbine, and steam gas mixture is then heated further to 500-600° C in the convection sectionbefore entering the primary reformer. In some new or revamped plants the preheated steam/gasmixture is passed through an adiabatic pre-reformer and reheated in the convection section beforeentering the primary reformer.

The amount of process steam is given to adjust steam to carbon-molar ratio (S/C- ratio), whichshould be around 3.0 for the reforming processes. The optimum ratio depends on several factors,such as feedstock quality, purge gas recovery, primary reformer capacity, shift operation and theplant steam balance. In new plants, S/C ratio may be less than 3.0.

The primary reformer consists of a large number of high-nickel chromium alloy tubes filled withnickel-containing reforming catalyst in a big chamber (Radiant box) with burners to provide heat.

The overall reaction is highly endothermic and additional heat is provided by burning of gas inburners provided for the purpose, to raise the temperature to 780-830°C at the reformer outlet.

The composition of gas leaving the reformer is given by close approach to the following chemicalequilibrium:

CH4 + H2O ¬¾® CO + 3H2CO + H2O ¬¾® CO2 + H2

The heat for the primary reforming is supplied by burning natural gas or other gaseous fuels, inthe burners of a radiant box containing catalyst filled tubes.

The flue gas leaving the radiant box has temperature in excess of 900°C, after supplying the highlevel heat to the reforming process. About 50-60% of fuel’s heat value is directly used in theprocess itself. The heat content (waste heat) of the flue-gas is recovered in the reformerconvection section, for various process and steam duties. The fuel energy required in theconventional reforming process is 40-50% of the process feed energy.

The flue-gas leaving the convection section at 100-200° C is one of the main sources of emissionsfrom the plant. These emissions are mainly CO2, NOx, with small amounts of SO2 and CO.

7.4.Secondary reforming:

Only 30-40% of the hydrocarbon feed is reformed in the primary reformer because of thechemical equilibrium at the actual operating conditions. The temperature must be raised toincrease the conversion. This is done in the secondary reformer by internal combustion of part ofthe gas with process air, which also provides the nitrogen for the final synthesis gas. In theconventional reforming process the degree of primary reforming is adjusted so that the airsupplied to the secondary reformer meets both the heat and the stoichiometric synthesis gasrequirement.

The process air is compressed to the reforming pressure and heated further in the primaryreformer convection section to about 600°C. The process gas is mixed with the air in a burner andthen passed over a nickel-containing secondary reformer catalyst. The reformer outlettemperature is around 1000°C, and up to 99% of the hydrocarbon feed (to primary reformer) isconverted, giving a residual methane content of 0.2-0.3 (dry gas bases) in the process gas leavingthe secondary reformer.

The process gas is cooled to 350-400°C in a waste heat boiler or waste heat boiler/super heaterdown stream from the secondary reformer.

7.5.Shift conversion:

The process gas from the secondary reformer contains 12-15% CO (dry gas bases) and most ofthe CO is converted in the shift section according to the reaction:

CO + H2O ¬¾® CO2+ H2

In the high temperature shift conversion (HTS), the gas is passed through a bed of ironoxide/Chromium oxide catalyst at around 400°C, where the CO content is reduced to about 3%(dry gas bases), limited by the shift equilibrium at the actual operating temperature. There istendency to use copper containing catalyst to increase conversion. The gas from the HTS iscooled and passed through the low temperature shift (LTS) converter.

The LTS is filled with a copper oxide/Zinc oxide-based catalyst and operates at about 200-220°C. The residual CO content is important for the efficiency of the process. Therefore, efficiency ofshift step in obtaining the highest shift conversion is very important.CO2 Removal

The process gas from the low temperature shift converter contains mainly H2, N2, CO2, andexcess process steam. The gas is cooled and most of the excess steam is condensed before itenters the CO2 removal section. This condensate usually contains 1500-2000 ppm of ammonia,800-1200 ppm of methanol and minor concentration of other chemicals. All these are strippedand in the best practices the condensate is recycled.

The heat released during cooling/condensation is used for:

Regeneration of CO2 scrubbing solution

Driving the absorption refrigeration units

Boiler water preheat.

The amount of heat released depends on the process steam to carbon ratio. If all this low levelheat is used for CO2 removal or absorption refrigeration, high-level heat has can be used for feedwater system. An energy-efficient process should therefore have a CO2 removal system with lowheat demand.

The CO2 is removed in a chemical or physical absorption process. The solvents used in chemical

absorption process are mainly aqueous amine solutions Mono Ethanolamine (MEA), activatedMethyl DiEthanolamines (aMDEA) or hot potassium carbonate solutions. Physical solvents areglycol dimethylethers (Selexol), propylene carbonates and others.Benfield process, Selexol, aMDEA or similar processes are considered as best practice.Residual CO2 content are usually in the range 100-1000 ppmv, depending on the process used.Contents of CO2 down to 50 ppmv are achievable.Methanation

The small residual amount of CO and CO2 in the synthesis gas, are poisonous for the ammoniasynthesis catalyst and must be removed by conversion to CH4 in the methanator:

CO + 3H2 ¾¾® CH4 + H2OCO2 + 4H2 ¾¾® CH4 + 2H2O

The reaction takes place at around 300°C in a reactor filled with nickel containing catalyst.Methane is an inert gas but water must be removed before entering converter.

7.6.Synthesis gas compression and ammonia Synthesis

Modern ammonia plants use centrifugal compressors for synthesis gas compression, usuallydriven by steam turbines, with steam being produced within the ammonia plant from exothermicheat of reactions. The refrigeration compressor, needed for condensation of product ammonia, isalso driven by a steam turbine.

The synthesis of ammonia takes place on an iron catalyst at pressure usually in the range of 100-250 kg/cm2 and temperatures in the range of 350-550°C:

N2 + 3H2 ¬¾¾® 2NH3

Only 20-30% of synthesis gas is converted to ammonia per pass in multibed catalyst filled theconverter due to the unfavorable equilibrium conditions. The ammonia that is formed is separatedfrom the product gas mixture by cooling/ condensation, and the unreacted gas is recycled with theaddition of fresh make up synthesis gas, thus maintaining the loop pressure. In addition, extensiveheat exchange is required due to exothermic reaction and large temperature range in the loop.

A newly developed ammonia synthesis catalyst containing ruthenium on a graphite support has amuch higher activity per unit of volume and has the potential to increase conversion and loweroperating pressure. This has the potential to reduce energy consumption.

Synthesis loop arrangement differ with respect to the points in the loop at which the make-up gasis delivered and the ammonia and purge gas are taken out.

Conventional reforming with methanation as the final purification step, produces a synthesis gascontains inerts (Methane and argon) in quantities that don’t dissolve in the condensed ammonia.The major part of these is removed by taking out a purge stream from the loop. The size of thispurge stream controls the level of inerts in the loop to about 10-15%. The purge gas is scrubbedwith water to remove ammonia before being used as fuel or before being sent to hydrogenrecovery unit.

Ammonia condensation is far from complete if cooling is with water or air and is usually notsatisfactory. Vaporizing ammonia is used as a refrigerant in most ammonia plants, to achievesufficiently low ammonia concentration in the recycled gas. The ammonia vapours are liquefiedby compression in the refrigeration compressor.

7.7.Steam reforming with excess air secondary reforming

This process is divergent than the conventional process broadly in the following ways:

1.Decreased firing in primary reformer 2.Increased process air flow to the secondary reforming 3.Cryogenic final purification after methanation 4.Lower inert level of the make-up syngas.

In this process part of load of primary reformer is shifted to a thermodynamically more efficientsecondary reformer. However, excess nitrogen has to be removed in the gas purification step.

7.8.Heat exchange auto thermal reforming:

From thermodynamic point of view, it is wasteful to use the high-level heat of secondaryreformer outlet gas and the primary reformer flue-gas, both at temperatures around 1000°C,simply to raise steam. Recent developments are to recycle this heat to the process itself, by usingthe heat content of the secondary reformed gas in a newly developed primary reformer (gasheated reformer, heat exchange reformer), thus eliminating the fired furnace. Surplus air oroxygen-enriched air is required in the secondary reformer to meet the heat balance in this autothermal concept.

The developers of this technology claim better performance on energy and are trying to perfectthe systems.

Best available techniques (BAT) reforming process for new plants:

The modern versions of the conventional steam reforming and excess air reforming processes willstill be used for new plants for many years to come. Developments are expected to go in thefollowing directions:

i. Lowering the steam carbon ratioii. Shifting duty from primary to secondary reformeriii. Improved final purificationiv. Improved synthesis loop efficiencyv. Improved power energy systemvi. Low NOx burnersvii. Non iron based ammonia synthesis catalyst

In India almost all NG based plants and naphtha based plants are based on conventional steamreforming process. Some newer plants have introduced adiabatic pre-reforming, operating at lowsteam carbon ratio, introduced purge gas recovery to control inerts efficiently, provided low NOxburners and improved steam & power system resulting in better performance.

7.9.Partial oxidation of heavy oils

The partial oxidation process is used for the gasification of heavy feedstock such as residual oilsand coal. Extremely viscous hydrocarbons may also be used as fraction of the feed. An airseparation unit is required for the production of oxygen for partial oxidation step. The nitrogen isadded in the liquid nitrogen wash to remove impurities from the synthesis gas and to get therequired hydrogen/nitrogen ratio in the synthesis gas. The partial oxidation is a non-catalyticprocess, taking place at high pressure (>50 kg/cm2) and temperatures around 1400°C. Somesteam is added for temperature moderation. The simplified reaction pattern is:

-CHn - + 0.5 O2 ¾¾® CO + n/2H2

Carbon dioxide, methane and some soot are formed in addition. The sulphur compounds in thefeed are converted to hydrogen sulfide. Mineral compounds in the feed are transformed in tospecific ashes. The process gas is freed from solids by water scrubbing after waste heat recoveryand the soot is recycled to feed. The ash compounds are drained with the process condensateand/or together with the soot. The hydrogen sulphide in the process is separated in a selectiveabsorption step and reprocessed to elemental sulphur in a Claus unit. The shift conversion usuallyhas two temperature shift catalyst beds with intermediate cooling. Steam for shift conversion issupplied partially by a cooler-saturator system and partially by steam injection.CO2 removed by using an absorption agent, which might be the same as in the sulphur removalstep.

Residual traces of absorption agent and CO2 are then removed from the process gas, beforefinal purification by a liquid nitrogen wash. In this unit practically all the impurities are removedand nitrogen is added to give the stoichiometric hydrogen to nitrogen ratio. Ammonia synthesis isquite similar to steam reformation plants, but more efficient due to high purity of synthesis gasfrom liquid nitrogen wash unit and the loop does not require a purge.

In India presently four plants set up in 70’s are working using the partial oxidation process to use

Fuel Oil or LSHS feed stocks. Due to higher energy consumption in these plants and due tohigher basic cost of feedstock in comparison to NG, these would changeover to NG as feedstock

7.10.Description Of Urea Production Processes

The commercial synthesis of urea involves the combination of ammonia and carbon dioxide athigh pressure to form ammonium carbamate, which is subsequently dehydrated by the applicationof heat to form urea and water.

2NH3 + CO2 ¨ NH2COONH4 ¨ CO(NH2)2 + H2O

Ammonia Carbon Ammonium Urea WaterDioxide Carbamate

First reaction is fast and exothermic and essentially goes to complete under the reactionconditions used industrially. Subsequent reaction is slower and endothermic and does not go tocompletion. The conversion (on a CO2 basis) is usually in the order of 50-80%. The conversionincreases with increasing temperature and NH3/CO2 ratio and decreases with increasing H2O/CO2ratio.

The design of commercial processes involves three major considerations: to separate the urea from other constituents, to recover excess NH3 and decompose the carbamate for recycle.

The simplest way to decompose carbamate to CO2 and NH3 requires the reactor effluent to bedepressurized and heated. Since it is essential to recover all the gases for recycle to the synthesisto optimize raw material utilization and since re-compression was too expensive an alternativewas developed. This involved cooling the gases and re-combine them to form carbamate liquor,which was pumped back to the synthesis. A series of loops involving carbamate decomposers atprogressively lower pressure and carbamate condensers were used. This was known as the “Totalrecycle process”. A basic consequence of recycling the gases was that the NH3/CO2 molar ratio inthe reactor increased thereby increasing the urea yield.

Significant improvements were subsequently achieved by decomposing the carbamate in thereactor effluent without reducing the system pressure. This “Stripping Process” dominatedsynthesis technology and provided capital/energy savings. Two commercial stripping systemswere developed, one using CO2, and other using NH3 as the stripping gases.

Since the patents on stripping technology have expired, other processes have emerged whichcombine the best features of Total Recycle and Stripping Technologies.

The urea solution arising from the synthesis /recycle stages of the process is subsequentlyconcentrated to a urea melt for conversion to solid prilled or granular product.Improvements in process technology have concentrated on reducing production costs andminimizing the environmental impact. These include boosting CO2 conversion efficiency,increasing heat recovery, reducing utilities consumption and recovering residual NH3 and ureafrom plant effluents. Simultaneously the size limitation of prills and concern about the prill toweroff gases effluent were responsible for increased interest in melt granulation processes and prilltower emission abatement. Some or all these improvements have been used in updating existingplants and some plants have added computerized systems for process control, New ureainstallations vary in size from 800 to 2000 tonnes per day.Modern processes have very similar energy requirements and very high material efficiency. Thereare some differences in the details of energy balances but they are deemed to be minor in eff

Block diagram for CO2 and NH3 stripping total recycle processes are as shown in Figure 3 and 4respectively.

8.Growth As on 31 Jan 08, the country has an installed capacity of 120.61 lakh MT of nitrogen and 56.59 lakh MT of Phosphate. Presently, there are 56 large size fertilizer plants in the country manufacturing a wide range of nitrogenous, phosphatic and complex fertilizers. Out of these, 30 (as on date 28 are functioning) units produce urea, 21 units produce DAP and complex fertilizers, 5 units produce low analysis straight nitrogenous fertilizers and the remaining 9 manufacture ammonium sulphate as-product. Besides, there are about 72 medium and small-scale units in operation producing SSP. The sector-wise installed capacity is given in the table below:-

Sector -wise and Nutrient - wise Installed Capacity of Fertilizer Manufacturing Units (as on 1st January, 2008)

S.No Sector Capacity( Lakh MT)

Percentage Share

Nitrogen Phosphatic Nitrogen Phosphatic

1 Public Sector 34.98 4.33 29.00 07.65

2 Cooperative Sector 31.69 17.13 26.27 30.27

3 Private Sector 53.94 35.13 44.73 62.08

Total 120.61 56.59 100.00 100

9.Development of the Industry9.1.Capacity Build-UpAt present, there are 56 large size fertilizer units in the country manufacturing a wide range of nitrogenous, phosphatic and complex fertilizers. Of these, 30 units ( as on date 28 units are functioning ) produce urea, 21 units produce DAP and complex fertilizers, 5 units produce low analysis straight nitrogenous fertilizers and 9 manufacture ammonium sulphate as by-product. Besides, there are about 72 small and medium scale units in operation producing single super phosphate (SSP). The total installed capacity of fertilizer production which was 119.60 lakh MT of nitrogen and 53.60 lakh MT of phosphate as on 31.03.2004, has marginally increased to 120.61 lakh MT of nitrogen and 56.59 lakh MT of phosphate as on 31.01.2008.

9.2.Production capacity and capacity utilizationThe production of fertilizers during 2006-07 was 115.78 lakh MT of nitrogen and 45.17 lakh MT of phosphate. The production target for 2007- 2008 has been fixed at 119.08 lakh MT ofnitrogen and 49.14 lakh MT of phosphate, representing a growth rate of 2.85% in nitrogenand 8.79% in phosphate, as compared to the actual production in 2006-2007.

Production target for nitrogenous fertilizer is less than the installed capacity because of constraints in supply and quality of natual gas for Rashtriya Chemicals & Fertilizers (RCF), Trombay and Bramaputra Valley Fertilizer Corporation Ltd. (BVFCL), Namrup. Similarly, the production target for phospahtic fertilizer is less than installed capacity due to constraints inavailability of raw materials/ intermediates which are largely imported.

9.3.Strategy for GrowthThe following strategy has been adopted to increase fertilizer production:

• Expansion and capacity addition/efficiency enhancement through retrofitting / revamping of existing

fertilizer plants.

• Setting up joint venture projects in countries having abundant and cheaper raw material resources.

• Working out the possibility of using alternative sources like liquified natural gas, coal gasification,

etc., to overcome the constraints in the domestic availability of cheap and clean feedstock, particularly for the production of urea.

• Revival of the closed units by setting up brownfield units subject to availability of gas.

• Setting up of Greenfield projects in urea sector.

10.Domestic ProjectsPolicy Environment

• No license is required for setting up a new fertilizer project or for expansion of capacity of existing

fertilizer plants. Investments/projects in the fertilizer sector can be undertaken after filing the industrial Entrepreneur's Memorandum with the secretariat for Industrial Assistance(SIA) as per Industrial policy resolution of the Government dated 24th July, 1991.

• A prior clearance of the project site from environmental angle is, however, a statuary requirement.

• Any major public/cooperative Sector project for setting up new plants or for

revamp/retrofit/expansion of existing plants are subject to investment approval of the Government through the Public investment Board etc., depending on the investment involved and the delegated financial powers available to each company.

11.Technological Advancements• To meet the demand of fertilizers in the country through indigenous production, self-reliance in

design engineering and execution of fertilizer projects is very crucial. This requires a strong indigenous technological base in planning, development of process know-how, detailed engineering and expertise in project management and execution of projects. With the continuing support of the Government for research and development as well as for design engineering activities over the years, Indian consultancy organisations in the filed of fertilizers, Project and Development India Ltd. (PDIL) & FACT Engineering and Design Organisation (FEDO) have grown steadily in tandem with the fertilizer industry. These consultancy organisations are today in a position to undertake execution of fertilizer projects starting from concept/designing to commissioning of fertilizer plants in India and abroad.

• A concept has been developed to carry out research and development / basic research work by

mutual understanding between industry and academic institutions, and the Department of Fertilizers has sponsored research and development projects through the Indian Institutes of Technology, Delhi and Kharagpur under the Science and Technology activity for the development of research / basic research in the filed of fertilizer Industry. Action to widen the sphere of research and development to encompass areas of fertilizer usage etc is also under consideration.

• The fertilizer plant operators have now fully absorbed and assimilated the latest technological

developments, incorporating environmental friendly process technologies, and are in a position to operate and maintain the plants at their optimum levels without any foreign assistance and on international standards in terms of capacity utilization, specific energy consumption & pollution standards. The average performance of gas-based plants in the country today is amongst the best in the world.

• The fertilizer industry is also carrying out de-bottlenecking and energy saving schemes in their

existing plants and to enhance the capacity and reduce the specific energy consumption per tonn of product. Companies are also planning to convert their existing Naptha- based fertilizer plants to Liquefied Natural Gas (LNG).

• The country has also developed expertise for fabrication and supply of major and critical equipment

such as high-pressure vessels, static and rotating equipment, Distributed Control System (DCS), heat exchangers and hydrolyser for fertilizer projects. The indigenous vendors are now in a position to compete and secure orders for such equipment both in India & abroad under International Competitive Bidding (ICB) procedure. Presently, about 70% of the equipment required for a major domestic fertilizer plant are designed and manufactured indigenously.

• A significant development/advancement has also been made in the country in the field of

manufacturing of catalysts of various ranges by our catalyst-manufacturing Organisation like PDIL. PDIL is implementing the schemes for enhancement of capacity and technological upgradation in their existing catalyst plant and other utilities at Sindri to compete in the International market.

12.IT in FertilizerThe advent of Information Technology (IT) has lead to a stage that every organization, be it big or small, government or private has over the years started using IT in some form or the other in their day to day operation. The role played by IT in the fertilizer sector does not need any introduction. Just to name a few departments where IT is playing a key role are HRD, Production, Marketing, and Finance etc.

• IT Based Systems Towards Increasing Efficiency in Fertilizer Management

• Web Based Fertilizer Production Monitoring System

• Web Based Fertilizer Distribution and Movement Information System

• Web Based Fertilizer Concession Scheme Monitoring System

• Fertilizer Subsidy Payment Information System

• Application System for Monitoring Energy Consumption Norms

• Application System for Revision in Urea Concession Rates

• Fertilizer Equated Freight Fixation Information System

• Web Based Fertilizer Import Management System

• Web Based Handling & Payments System for Fertilizer Imports

• Fertilizer Project Monitoring System

• Information & Communication Technology (ICT)Infrastructure

• Web Site/ Web Applications Hosting

• IntraFERT Portal

• Fertilizer Monitoring System

13.Role of NIC

To meet the national objective of making fertilizers available timely, adequately in good quality and at affordable price to the farmers, proper planning and monitoring of various aspects like fertilizer production, imports, quality control, distribution, movement, sales, stocks, subsidies and concessions is essential. In order to manage these issues effectively, Fertilizer Management On-line has been formulated by the Department of Fertilizers in consultation with National Informatics Centre. The major objective of the system is to have an evaluation system to ensure a uniform mechanism of planning and control. The web based systems for Fertilizer Production, Imports, Handling, Distribution and Movement of Fertilizers have been implemented for on-line monitoring to keep a constant vigil on the demand, supply and availability position to minimize the demand-supply gap in different parts of the country on fortnightly basis with information access to all the stake holders i.e. G2G, G2B and G2C levels. Further, to facilitate farmers by providing fertilizers at affordable prices as well as to ensure health and growth of Fertilizer Industry in the country, the IT based systems have been developed and Implemented for appraisal and disbursement of Subsidies/Concessions to the manufacturers/suppliers.

The five major web based systems in operation are

• Fertilizer Distribution and Movement Information System

• Fertilizer Production Monitoring System

• Fertilizer Concession Scheme Monitoring System

• Fertilizer Subsidy Payment Information System

• Fertilizer Import Management System

• System for Import of Fertilizer Raw Materials

• Handling & Payments System for Fertilizer Imports

• Fertilizer Equated Freight Fixation Information System

14.Joint Ventures AbroadThe details of the existing joint ventures in the fertilizer sector are :-

Joint Venture Oman India Fertilizer Company, Oman (OMIFCO):KRIBHCO, IFFCO and Oman Oil Company with a share holding of 25%, 25% and 50% respectively have collaborated and set up a world-class urea-ammonia fertilizer plant in Oman. It consists of 5060 MTPD granular Urea and 3500 MTPD Ammonia plants along with all other offsite and utilities in the coastal town of Sur in Oman. The annual capacity of the fertilizer complex is 16.52 lakh MT of granular Urea.

ICS(Senegal)

The Government of India (GOI), Indian Farmers Fertiliser Cooperative Ltd. (IFFCO) and Southern Petrochemicals Industries Corporation Ltd. (SPIC) are equity partners in a joint venture company set up in Senegal. The initial equity contribution of the Indian consortium in the venture in 1980 amounted to Rs. 13.67 crore, i.e. about 18.20% of its total equity. At present, the Indian sponsors together hold 27.28% equity (GOI-6.97%, IFFCO-19.09% and SPIC-1.13%), in the Joint Venture Company in Senegal named Industries Chimiques du Senegal (ICS).

JV with JordanSPIC, Jordan Phosphates Mines Company Ltd. (JPMC) and Arab Investment Company (AIC)have set up a joint venture project in Jordan to produce 2.24 lakh tonnes of phosphoric acidper annum. 52.17% of the equity of the joint venture named Indo Jordan Chemicals Company Limited is held by SPIC, 34.86% by JPMC and 12.97% by AIC. The plant had beencommissioned in May 1997. The Phosphoric Acid from this venture is supplied to SPIC and few other fertilizer unit in India.

JV(Morocco)

A Joint venture IMACID (Indo Moroc Phosphore SA) between Office Cherifien Des Phosphates (OCP), Morocco and Chambal Fertilizers & Chemicals Ltd. (CFCL) to produce 3.30 lakh tonnes of phosphoric acid per annum was commissioned in Morocco in October 1999. After completion of first phase of revamp / debottlenecking project during 2004, the capacity has been increased to 3.65 lakhs tonnes per annum. The equity of US$ 65 million in the venture was held by OCP & CFCL equally. Subsequently in May 2005, both OCP & CFCL have sold one-third of their equity stake in IMACID to TATA Chemicals Limited.

15.Overseas Joint ventures under implementation/considerationJV in UAESPIC is in the process of setting up a gasbased nitrogenous fertilizer plant at Dubai in United Arab Emirates to produce 4.00 LMT of urea per annum at an estimated cost of US$ 170 million. The joint venture company by name SPIC Fertilisers and Chemicals Limited, incorporated in Mauritius is promoted by SPIC with equity participation of US $ 22.64 millionand Emirates Trading Agency of UAE with equity holding of US $ 6.4 million. The project is currently under discussion.

JV(Egypt)

Indian Farmers Fertiliser Cooperative Ltd (IFFCO and El Nasr Mining Co. (ENMC) haveformed a Joint Venture Company, the ‘ Indo Egyptian Fertiliser Company’ on 15th November2005 for setting up a Phosphoric Acid plant in Egypt with an installed capacity of 5,00,000 tonnes of P205 per annum. The estimated cost of the Project is US$ 325 million, which is expected to be financed with a debt: equity ratio of 67:33. IFFCO and its Affiliates would hold the majority equity shareholding of 76% while ENMC and Affiliates would hold the balance equity of 24% in the Joint Venture Company. ENMC, the largest Rock Phosphate Mining Company of Egypt will supply Rock Phosphate, the basic raw material of the Project and IFFCO will buy back the entire Phosphoric Acid production. The Project construction period is estimated at 36 months. While the financial closure of the project has been achieved, the construction of the project has not commenced due to delay in issuance of licence by the Egyptian Industrial Development Authority.

JV(Tunisia)

Gujarat State Fertilizers & Chemicals Ltd (GSFC) and Coromandel Fertilizers Ltd (CFL) alongwith Group Chimique Tunisien (GCT) & M/s Compagnie Des Phosphates De Gafsa (CPG) are setting up a joint venture project in Tunisia for production of 3,60,000 MTs of Phosphoric Acid per annum. The name of the JV Company is M/s Tunisian Indian Fertilisers S.A. (TIFERT). The JV will sell its full production to both the Indian parties viz GSFC and CFL. An MOU to this effect was signed in October, 2005 between GSFC & GCT/CPG. The cost of the project is approx. US $ 165 million + 5% with equity of US$66 million and borrowings of US $99 million. The project is expected to be commissioned by mid 2009 or latest by December, 2009.

JV(Jordan)

The Indian farmers Fertilizers Cooperative Ltd (IFFCO) and Jordan Phosphate Mining Company (JPMC) have agreed on a joint venture for setting up of a Phosphoric Acid plant in Jordan with an installed capacity of 5,00,000 tonnes of P205 per annum. The equity holding is 52:48 between IFFCO and JPMC, respectively. The financial closure and environmental closure are in progress and are likely to be achieved within May 08. The project construction period is estimated at 36 months thereafter.

16.Concessions/incentives on importTo encourage investment in the fertilizer sector, the following concessions are available to the domestic industry:

• Concessional customs duty on import of capital goods for setting up of new plants/substantial

expansion /renovation/modernization of existing plants.

• Deemed export benefit to indigenous suppliers of capital goods for

new/revamp/retrofit/modernization projects of fertilizers projects of fertilizers provided such supplies are made under the procedure of International Competitive Bidding.

17.Impact Of Budget 2007/08

• Rs 60,000 crore debt relief package scheme for farmers.

• An Outlay Of Rs 2,80,000 crore for agricultural credit

• Greater Emphasis on irrigation projects

• Customs duty on phosphoric acid to be reduced from 7.5% to 5%

• Naphtha used in the fertiliser industry to be exempt from customs duty

• Dividend tax paid by parent company allowed to be set off against the same paid by its subsidiary

18.DEMAND & SUPPLY

Production,Import & Consumption

Distribution Fertilisers In India

Demand- Nitrogen

Nitrogen-

1. Total demand is expected to increase at 3.3%

2. Total supply is expected to increase at 3.9%

3. Total deficit will increase upto 2009-10 & then expected to reduce in 2010-11 & 2011-12

4. 14 Urea plants under expansion ( 11- Debottlenecking 3 – Expansion )

5. Proposal for debottlenecking of 2 plants have been cleared & remaining are wanted till date

Demand - Phosphates

Phosphate – 1. Total demand will increase at 4.8%

2. Total supply will increase at 2.4%

3. Total deficit to increase from 2006-07 up to 2011-12

Potash – 1.Total demand will increase at 5.5%

Forcast

Forcast of demand,supply & balance in india

Imported Materials

1. Phosphate – Raw materials & intermediates for production

2. Potash – Entire demand 3. Urea – Natural gas & LNG

19.Companies

Public Sector Companies –

• NFL - Nangal, Panipat, Bhatinda, Vijaipur- Urea (Kisan Urea)

• FACT- Ambalumedu & Cochin- Urea & Complex Fert.

• RCF – Trombay & Thal- Urea (Ujjwala) & 20-20-20 (Sufala)

• MFL – manali – Ammonia, urea,Complex & Biofertiliser (Vijay)

• SAIL – Rourkela – CAN (Sona)

• NLC – Nayevelli- Urea (Neyeveli Urea)

• PPL – Paradeep – DAP, 10-26-26, 12-32-16 (kalyani)

• PPCL – Amjhor, Saladipuram & Dehradoon- SSP & Rock Phosphate (Soneganga khad)

• HFC – kamroop, Durgapur, Barauni, haldia- Urea (Moti)

• FCI – Sindri, Ranagundam, talcher & Gorakhpur- Urea (Swasthik)

• HCL – Khetrinagar- SSP (Jyoti)

Cooperative Fertiliser Companies -

• IFFCO- Kalol, Phulpur, Aonla ( Urea) & kandla ( NPK/DAP)

• KRIBHCO – Hajira(Surat) – Urea & Biofertilisers

Other Private Companies

• Oswal, TATA, Indogulf, chambal, Nagarjuna, Coromandal, Godavari, Duncan, Zuari, Sreeram etc..

• DMCC- SSP

Current Status

India's Rank

Consumption

Production

Conclusion

• Nitrogen deficit will increase & then decrease in 2010-11 & 2011-12.

• P2O5 & K2O demand will increase up to 2012.

• Global surplus of nitrogen is expected to increase due to commissioning of new projects .

• Supply & demand balance of P2O5 & K2O will remain tight.

• Realistic production & demand forecast is essential for macro-planning & decision making.

• Over-estimation leads to glut & under-estimation causes scarcity.