GAIL, Chhattisgarh govt sign MoU to explore 12.7 LMT gas-based urea plant

State-run gas utility GAIL (India) Limited has signed a non-binding memorandum of understanding (MoU) with the Chhattisgarh government to explore the development of a large-scale greenfield gas-based fertiliser plant. This initiative reinforces India’s mission to strengthen domestic urea production and reduce its multi-billion dollar import bill.

Under the agreement, GAIL will initiate detailed techno-economic studies for a urea manufacturing facility with an annual capacity of 12.7 lakh metric tonnes (LMT). The facility is proposed to be situated along GAIL’s Mumbai–Nagpur–Jharsuguda (MNJPL) natural gas pipeline corridor, ensuring immediate access to feedstock and optimised logistics.

The MoU was signed today in Raipur in the presence of Chhattisgarh Chief Minister Vishnu Deo Sai. Key signatories included Rajat Kumar, Secretary (Commerce and Industries) for the state, and Rajeev Kumar Singhal, Director (Business Development) at GAIL.

Following the announcement, GAIL shares settled at ₹171.95 on the NSE, up 0.13% in a steady trading session.

Summary

GAIL (India) Ltd has partnered with the Chhattisgarh government via a non-binding MoU to evaluate the feasibility of a 12.7 LMT greenfield urea project. Planned along the strategic Mumbai–Nagpur–Jharsuguda (MNJPL) pipeline, the project leverages natural gas connectivity to boost domestic fertilizer output. While the state government will assist with land and statutory clearances, GAIL will determine the final investment decision (FID) pending a comprehensive techno-economic study.

Frequently Asked Questions (FAQs)

Q1: What is the proposed capacity of the new plant? 

The facility is being planned with a standard world-scale capacity of 12.7 lakh metric tonnes (LMT) of urea per annum.

Q2: Why was Chhattisgarh chosen for a gas-based plant? 

While Chhattisgarh is coal-rich, the location was chosen due to its proximity to GAIL’s MNJPL pipeline, which is expected to be fully commissioned by December 31, 2025. This allows for cleaner, more efficient production compared to coal gasification.

Q3: Is the investment confirmed? 

No. The MoU is currently non-binding. GAIL will proceed with the capital expenditure (capex) only after the techno-economic feasibility study confirms the project's long-term viability.