Date:10/03/2004 URL: http://www.thehindubusinessline.com/2004/03/10/stories/2004031001230200.htm

Back Spic close to gas supply pact for Dubai project

Vimala Vasan

Abu Dhabi , March 9

SPIC Fertilizers and Chemicals FZE, a $190-million project at the Jebel Ali Free Zone, in Dubai emirate, which has been stalled for sometime due to non-availability of gas supplies, is expected to make headway in a few months as talks are on to source gas from suppliers in the region, according to Dr A.C. Muthiah, Chairman of Spic Ltd.

Dr Muthiah, who visited Abu Dhabi as head of a FICCI delegation participating in the Joint Business Council meeting with the UAE Chambers of Commerce and Industry, told Business Line that Spic is close to finalising an agreement for interim source of gas supply for the project.

Spic is also in talks with the Dolphin Energy Ltd for gas supplies, when the multi-billion dollar project for transporting gas from Qatar to the UAE is completed.

Dr Muthiah said that the Jebel Ali project is 60 to 70 per cent complete and will go on stream within 15 months from the time an agreement for gas supply is finalised, he said. Earlier, Spic had entered into an agreement with the Dubai authorities for supply of gas in 2001, but the latter has not been able to confirm allocation of gas to the project so far due to non-availability.

"We are in talks with the Dubai authorities and they have said that they will allocate gas when it is available. We are also in talks with suppliers in Abu Dhabi and elsewhere and we are very close to finalising an agreement," he said. Once the gas agreement is in place, financial closure with a European bank will be completed.

Dr Muthiah said that originally the Spic venture, which was due to have been commissioned before the year 2000, was planned as a naphtha-based project, but when the prices of naphtha went up, it was converted to a gas-based project.

He indicated that once the mega Dolphin gas venture, which will bring in gas from Qatar to the UAE via a sub-sea link, is completed the Spic project will definitely be assured of regular gas supplies.

The Spic project, one of the largest production units at Jafz, which was to have been commissioned in 1999, has been indefinitely delayed due to problems related to sourcing gas for the major venture. Around 40 million cubic metres of gas per day are required for the project.

The project for production of phosphoric acid and sulphuric acid at Spic's joint venture in Jordan, Indo-Jordan Chemicals, is well underway, he added.