The $180-million fertiliser project of Spic Fertilisers and Chemicals FZE (SFC) in the Jebel Ali Free Zone is set for takeoff now that the Dubai government has made a long-term commitment to supply gas.

The government has agreed to supply 40,000 million British thermal units (mbtu) per day of natural gas for an initial 15 years, the Gulf News said in a report. A gas supply and purchase agreement will be signed soon, a senior SFC official said.

Commercial production at the Jebel Ali plant will begin in the last quarter of next year, deputy managing director S Chandramohan said. Some 400,000 tonnes of prilled urea and 226,000 tonnes of ammonia will be produced annually at the plant, all for export to India under a buyback arrangement between Spic India and SFC.

The Jafz-based unit is a joint venture between South Indian agri-business major Spic and Dubai's ETA Group. The project, set up in 1996 with an initial investment of $160 million, had to be revised by an additional amount later. The estimated outlay is now $180 million. Construction began in 1998 after Spic brought a second-hand fertiliser plant from Sri Lanka to Jebel Ali, but the project made little headway due to high naphtha prices and the absence of a reliable gas supply.

Over 50 per cent of the project has been completed at an estimated cost of $70 million. According to sources, the gas is expected to come from the Abu Dhabi-Dubai gas pipeline. The UK's MW Kellogg is the prime engineering contractor for the ammonia plant and Stamicarbon BV of the Netherlands is the technology provider for the urea plant. SpicSMO and Technip India are also involved in the project.

The investment in the Jebel Ali project is the largest by any overseas company in the free zone. It is also the first urea/ammonia project of any Indian company abroad. Spic has another Middle East interest, Indo-Jordan Chemicals Co Ltd, a $170 million joint venture based at Eshidiya in Jordan and producing phosphoric acid.