Mumbai

As India is going ahead with its plans to set up a 1.3 million tonne urea plant in Iran, a delegation will visit the Persian Gulf country next month to finalise 1-2 local partners for the project.

The government has nominated Rashtriya Chemicals and Fertilizers Ltd (RCF) along with Gujarat Narmada Valley Fertilizers and Chemicals (GNFC) and Gujarat State Fertilizer Corn (GSFC) for proposed 1.3 million tonne urea joint venture plant in Iran.

The consortium is planning to set up joint venture project at Chahbahar in Iran using natural gas as feed stock which is abundant in that country with an estimated investment of USD 903 million.

The consortium has appointed SBI Capital to identify local partner for its urea project in Iran. After recent lifting of sanctions against Iran, 5-6 partners have been identified and a team of consortium will soon go to Iran to zeroing on 1-2 partners, RCF Director (Finance) Suresh Warior told PTI.

RCF will hold 16 per cent stake in the venture and invest around Rs 700-800 crore, Warior said, adding that it needed commitment of assured supply of gas and 100 per cent urea to be brought to India.

India’s annual demand of urea is about 30 million tonnes, while the domestic production is around 22 million tonnes.

Both India and Iran were in talks since 2013 for setting up a fertiliser plant in the Persian Gulf nation, but the proposal was stuck over gas price issue.

The proposed urea joint venture plant in Iran would be on the lines of OMIFCO (Oman India Fertiliser Company) in Oman, where the Indian entities have jointly invested in urea manufacturing with local player.

OMIFCO is 50 per cent owned by the Oman Oil Company SAOC and 25 per cent each by the IFFCO (Indian Farmers Fertiliser Cooperative Limited) and KRIBHCO (Krishak Bharati Cooperative Limited).

The move by India to set up urea unit comes as foreign countries and companies are rushing to rekindle business with the Islamic Republic after the conclusion of diplomatic talks between Iran and the six powers in July.

PTI