Fertilizers Industry

FERTILIZERS

CONTENTS 1.INTRODUCTION 2.MAP 3.RAW MATERIALS Nitrogen Ammonia Urea Phosphorus Phosphoric Acid Potassium

4.MULTI-NUTRIENT PRODUCTION Phosphate Fertilizers Nitrogen Fertilizers Potash Fertilizers Multi-nutrient Fertilizers

5.ENERGY USE 6.FERTILIZER PROCESS 7.DETAILLED PROCESS 8.GROWTH 9.DEVELOPMENT OF INDUSTRY Capacity Build-Up Production capacity and capacity utilization Strategy for Growth

10.DOMESTIC PROJECTS Policy

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 & SUPPLY Production,Import & Consumption Distribution Of Fertiliser In INDIA Demands- Nitrogen Demands- Phospates Forecast Imported Materials

18.COMPANIES PublicSector 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 selfreliance 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 of urea and other ammonia based fertilizers methane presents the major input which is gained from natural gas/associated gas, naphtha, fuel oil, low sulfur heavy stock (LSHS) and coal. In the more recent past, production has more and more switched over to the use of natural gas, associated gas and naphtha as feedstock. Out of these, gas is most hydrogen rich 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 electricity generation and provides the preferred fuel input to many other industrial processes. For production of phosphatic fertilizer most raw materials have to be imported. India has no source of elemental sulfur, phosphoric acid and rock phosphate. Yet, some low grade rock phosphate is domestically mined and made available to rather small scale single super phosphate fertilizer producers. Sulfur is produced as a by-product by some of the petroleum 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 Production Fertilizers 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 sulfur heavy stock and coal. The choice of the feedstock is dependent on the availability of feedstock 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. It accounts for 80% of the energy consumption for nitrogenous fertilizer. The feedstock mix used for ammonia production has changed over the past. Since new capacity in the form of gas based fertilizer plants was added in the 1980s the share of gas has increased substantially. 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 in that these feedstocks are more efficient and less polluting than heavy fuels like fuel oil and coal. Furthermore, capacity utilization in gas based plants is generally higher than in other plants. Therefore, gas and naphtha present the preferred feedstocks for nitrogenous fertilizer production. Energy intensity in India’s fertilizer plants has decreased over time. This decrease is due to advances in process technology and catalysts, better stream sizes of urea plants and increased capacity utilization. Capacity utilization is important as losses and waste heat are of about the same magnitude no matter how much is actually produced in a plant at a specific point of time. The evolution of specific energy consumption on average and by feedstock is shown in Table 2.6. Since ammonia production holds the highest share of energy 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 scale of the plant. For example, a typical ammonia plant established in 1970s would be a 600 tpd gas based process with an efficiency of 9.8 to 10.2 Gcal/Mt. A plant established in early 1990s would consume only 8.0 to 8.5 Gcal/Mt. (Trivedi, 1998) The production of phosphatic fertilizer requires much less energy than nitrogenous fertilizer. Depending on the fertilizer product, in 1993-94, energy consumption varied from negative input for sulfuric acid to around 1.64GJ/tonne of fertilizer for phosphoric acid (TERI, 1996). For sulfuric acid the energy input is negative since more steam (in energy equivalents) is generated in waste heat boilers than is needed as an input.

6.Fertilizers Process Agricultural growth is mainly dependent on advances in farming technologies and increased use of chemical fertilizers. The fertilizers contain the three basic nutrients for agriculture: nitrogen (N), phosphorous (P) and potassium (K). Nitrogen is primarily provided 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 complex fertilizers that combine all three plant nutrients (NPK). Phosphate comes in the form of straight phosphatic fertilizers such as single super phosphate (16%P2O5) or as part of a complex fertilizer. Potassic fertilizer is available as straight potassic fertilizer, such as muriate of potash (60%K2O) or sulfate of potash (50%K2O) or as a complex NPK fertilizer component. The effectiveness of fertilizers can only be assured if applied in optimal combination specific to the local soil and climatic conditions. Nitrogen presents the most essential nutrient for plant growth holding the biggest share in the optimal mix. The basic raw material for the production of nitrogenous fertilizers is ammonia, for straight phosphatic fertilizers it is phosphate and for potassic fertilizers potash. Out of the three fertilizer types, production of ammonia is most energy and resources intensive. Its production process is presented in more detail here. The description draws on Phylipsen, Blok and Worrell (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 processes are available to produce hydrogen, differing primarily in type of feedstock used. The hydrogen production route predominantly used world wide is steam reforming of natural gas. In this process natural gas (CH4) is mixed with water (steam) and air to produce hydrogen (H2), carbon monoxide (CO) and carbon dioxide (CO2). Waste heat is used for preheating and steam production, and part of the methane is burnt to generate the energy required to drive the reaction. CO is further converted to CO2 and H2 using the water 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 requires more energy (up to 40-50% more) and is more expensive than steam reforming. The advantage of partial oxidation is a high feedstock flexibility: it can be used for any gaseous, liquid or solid hydrocarbon. In practice partial oxidation can be economically viable if used for conversion of relatively cheap raw materials like oil residues or coal. In this process air is distilled to produce oxygen for the oxidation step. A mixture containing among others H2, CO, CO2 and CH4 is formed. After desulfurization CO is converted to CO2 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 and simultaneously provides the nitrogen required for the ammonia synthesis reaction. A variety of nitrogenous fertilizers can be produced on the base of ammonia. Ammonia can be used in a reaction with carbon dioxide to produce urea. Ammonia nitrate can be produced through the combination of ammonia and nitric acid adding further energy in form of steam and electricity. Other fertilizer types produced on the base of ammonia include calcium ammonium nitrate (ammonium nitrate mixed with ground dolomite) and NP/NPK compound fertilizers. For the most part further energy is required to induce the necessary 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 acid very 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 fluid in 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% of the nitrogen application in India is in the form of urea and therefore most of the input energy goes to the manufacture of ammonia and urea. In view of this, processes involved in the manufacture of ammonia and urea are reviewed here.

7.1.Ammonia Production Process Ammonia is produced basically from water, air and energy. The energy source is usually hydrocarbon that provides hydrogen for fixing the nitrogen. The other energy input required is steam and power. This can be through coal or petroleum products or purchased power from a utility company. Steam reformation process of light hydrocarbon particularly Natural Gas (NG) is the most efficient route for the production of ammonia. The other routes are the partial oxidation of heavy oils if the available feedstock is residual heavy oil from a refinery. Coal has also been used to produce ammonia. The following is an approximate comparison of the energy consumption, cost of production and the capital cost of the plants for three the feedstocks. Energy consumption Investment cost Production cost

Natural Gas 1.0 1.0 1.0

Heavy Oil 1.3 1.4 1.2

Coal 1.7 2.4 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 is likely that natural gas will dominate as feedstock for ammonia production in the foreseeable future. Coal may become a competing feedstock if the prices of natural gas and petroleum products go very high due to depleting resources. For the present time and near future, the steam/air reforming concept based on natural gas is considered 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 air secondary reforming (stoichiometric H/N- ratio) 7.1.2 Steam reforming with mild conditions in fired primary reformer and excess air in secondary reformer (Under-stoichiometric H/N ratio) 7.1.3 Heat exchange auto thermal reforming, with a process gas heated steam reformer (heat exchange reformer) and a separate secondary reformer, or in a combined auto thermal reformer using 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 conversion The theoretical process conversions, based on methane feedstock, are given in the following approximate 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 the steam/ 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 is reduced 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 extraction turbine, and steam gas mixture is then heated further to 500-600° C in the convection section before entering the primary reformer. In some new or revamped plants the preheated steam/gas mixture is passed through an adiabatic pre-reformer and reheated in the convection section before entering the primary reformer. The amount of process steam is given to adjust steam to carbon-molar ratio (S/C- ratio), which should 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 the plant 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 with nickel-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 in burners 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 chemical equilibrium: CH4 + H2O ¬¾® CO + 3H2 CO + H2O ¬¾® CO2 + H2 The heat for the primary reforming is supplied by burning natural gas or other gaseous fuels, in the 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 high level heat to the reforming process. About 50-60% of fuel’s heat value is directly used in the process itself. The heat content (waste heat) of the flue-gas is recovered in the reformer convection section, for various process and steam duties. The fuel energy required in the conventional 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 emissions from 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 the chemical equilibrium at the actual operating conditions. The temperature must be raised to increase the conversion. This is done in the secondary reformer by internal combustion of part of the gas with process air, which also provides the nitrogen for the final synthesis gas. In the conventional reforming process the degree of primary reforming is adjusted so that the air supplied to the secondary reformer meets both the heat and the stoichiometric synthesis gas requirement. The process air is compressed to the reforming pressure and heated further in the primary reformer convection section to about 600°C. The process gas is mixed with the air in a burner and then passed over a nickel-containing secondary reformer catalyst. The reformer outlet temperature is around 1000°C, and up to 99% of the hydrocarbon feed (to primary reformer) is converted, giving a residual methane content of 0.2-0.3 (dry gas bases) in the process gas leaving the secondary reformer. The process gas is cooled to 350-400°C in a waste heat boiler or waste heat boiler/super heater down 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 of the 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 iron oxide/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 is tendency to use copper containing catalyst to increase conversion. The gas from the HTS is cooled 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 of shift 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, and excess process steam. The gas is cooled and most of the excess steam is condensed before it enters 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 stripped and 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 level heat is used for CO2 removal or absorption refrigeration, high-level heat has can be used for feed water system. An energy-efficient process should therefore have a CO2 removal system with low heat 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), activated Methyl DiEthanolamines (aMDEA) or hot potassium carbonate solutions. Physical solvents are glycol 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 ammonia synthesis catalyst and must be removed by conversion to CH4 in the methanator: CO + 3H2 ¾¾® CH4 + H2O CO2 + 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, usually driven by steam turbines, with steam being produced within the ammonia plant from exothermic heat of reactions. The refrigeration compressor, needed for condensation of product ammonia, is also driven by a steam turbine. The synthesis of ammonia takes place on an iron catalyst at pressure usually in the range of 100250 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 the converter due to the unfavorable equilibrium conditions. The ammonia that is formed is separated from the product gas mixture by cooling/ condensation, and the unreacted gas is recycled with the addition of fresh make up synthesis gas, thus maintaining the loop pressure. In addition, extensive heat 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 a much higher activity per unit of volume and has the potential to increase conversion and lower operating 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 gas is delivered and the ammonia and purge gas are taken out. Conventional reforming with methanation as the final purification step, produces a synthesis gas contains 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 this purge stream controls the level of inerts in the loop to about 10-15%. The purge gas is scrubbed with water to remove ammonia before being used as fuel or before being sent to hydrogen recovery unit. Ammonia condensation is far from complete if cooling is with water or air and is usually not satisfactory. Vaporizing ammonia is used as a refrigerant in most ammonia plants, to achieve sufficiently low ammonia concentration in the recycled gas. The ammonia vapours are liquefied by 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 efficient secondary 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 secondary reformer 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 using the heat content of the secondary reformed gas in a newly developed primary reformer (gas heated reformer, heat exchange reformer), thus eliminating the fired furnace. Surplus air or oxygen-enriched air is required in the secondary reformer to meet the heat balance in this auto thermal concept. The developers of this technology claim better performance on energy and are trying to perfect the systems.

Best available techniques (BAT) reforming process for new plants: The modern versions of the conventional steam reforming and excess air reforming processes will still be used for new plants for many years to come. Developments are expected to go in the following directions: i. Lowering the steam carbon ratio ii. Shifting duty from primary to secondary reformer iii. Improved final purification iv. Improved synthesis loop efficiency v. Improved power energy system vi. Low NOx burners vii. Non iron based ammonia synthesis catalyst In India almost all NG based plants and naphtha based plants are based on conventional steam reforming process. Some newer plants have introduced adiabatic pre-reforming, operating at low steam carbon ratio, introduced purge gas recovery to control inerts efficiently, provided low NOx burners 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 oils and coal. Extremely viscous hydrocarbons may also be used as fraction of the feed. An air separation unit is required for the production of oxygen for partial oxidation step. The nitrogen is added in the liquid nitrogen wash to remove impurities from the synthesis gas and to get the required hydrogen/nitrogen ratio in the synthesis gas. The partial oxidation is a non-catalytic process, taking place at high pressure (>50 kg/cm2) and temperatures around 1400°C. Some steam 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 the feed are converted to hydrogen sulfide. Mineral compounds in the feed are transformed in to specific ashes. The process gas is freed from solids by water scrubbing after waste heat recovery and the soot is recycled to feed. The ash compounds are drained with the process condensate and/or together with the soot. The hydrogen sulphide in the process is separated in a selective absorption step and reprocessed to elemental sulphur in a Claus unit. The shift conversion usually has two temperature shift catalyst beds with intermediate cooling. Steam for shift conversion is supplied 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 removal step.

Residual traces of absorption agent and CO2 are then removed from the process gas, before final purification by a liquid nitrogen wash. In this unit practically all the impurities are removed and nitrogen is added to give the stoichiometric hydrogen to nitrogen ratio. Ammonia synthesis is quite similar to steam reformation plants, but more efficient due to high purity of synthesis gas from 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 to higher 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 at high pressure to form ammonium carbamate, which is subsequently dehydrated by the application of heat to form urea and water. 2NH3 + CO2 ¬® NH2COONH4 ¬® CO(NH2)2 + H2O Ammonia Carbon Ammonium Urea Water Dioxide Carbamate First reaction is fast and exothermic and essentially goes to complete under the reaction conditions used industrially. Subsequent reaction is slower and endothermic and does not go to completion. The conversion (on a CO2 basis) is usually in the order of 50-80%. The conversion increases with increasing temperature and NH3/CO2 ratio and decreases with increasing H2O/CO2 ratio. 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 be depressurized and heated. Since it is essential to recover all the gases for recycle to the synthesis to optimize raw material utilization and since re-compression was too expensive an alternative was 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 at progressively lower pressure and carbamate condensers were used. This was known as the “Total recycle process”. A basic consequence of recycling the gases was that the NH3/CO2 molar ratio in the reactor increased thereby increasing the urea yield. Significant improvements were subsequently achieved by decomposing the carbamate in the reactor effluent without reducing the system pressure. This “Stripping Process” dominated synthesis technology and provided capital/energy savings. Two commercial stripping systems were developed, one using CO2, and other using NH3 as the stripping gases. Since the patents on stripping technology have expired, other processes have emerged which combine the best features of Total Recycle and Stripping Technologies. The urea solution arising from the synthesis /recycle stages of the process is subsequently concentrated to a urea melt for conversion to solid prilled or granular product. Improvements in process technology have concentrated on reducing production costs and minimizing the environmental impact. These include boosting CO2 conversion efficiency, increasing heat recovery, reducing utilities consumption and recovering residual NH3 and urea from plant effluents. Simultaneously the size limitation of prills and concern about the prill tower off gases effluent were responsible for increased interest in melt granulation processes and prill tower emission abatement. Some or all these improvements have been used in updating existing plants and some plants have added computerized systems for process control, New urea installations vary in size from 800 to 2000 tonnes per day. Modern processes have very similar energy requirements and very high material efficiency. There are 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 4 respectively.

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

2 3 Total

34.98

4.33

29.00

07.65

Cooperative Sector 31.69

17.13

26.27

30.27

Private Sector

53.94

35.13

120.61

56.59

44.73 100.00

62.08 100

9.Development of the Industry 9.1.Capacity Build-Up At 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 utilization The production of fertilizers during 2006-07 was 115.78 lakh MT of nitrogen and 45.17 lakh MT of phosphate. The production target for 20072008 has been fixed at 119.08 lakh MT of nitrogen and 49.14 lakh MT of phosphate, representing a growth rate of 2.85% in nitrogen and 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 in availability of raw materials/ intermediates which are largely imported.

9.3.Strategy for Growth The 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 Projects Policy 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 Fertilizer The 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 Abroad The 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 Jordan SPIC, 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 acid per 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 been commissioned 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 implementation/consideration

ventures

under

JV in UAE SPIC 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 million and 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) have formed a Joint Venture Company, the ‘ Indo Egyptian Fertiliser Company’ on 15th November 2005 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 import To 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

Nitrogen1. 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.