The commercial viability of producing urea by utilizing natural gas discovered in the marginal reservoir Dorado

Abstract

The island nation of Sri Lanka became a plantation economy back in the 19th and 20th centuries,and a significant number of farmers’ livelihoods still depend on agriculture itself. With the low cost of transportation and high solubility, urea fertilizer is leading the industry of agriculture. The current local urea demand is completely met by importations. A constant supply of Natural Gas (NG) is essential to manufacture urea locally. This study mainly focuses on introducing a viable solution for completely importing urea using indigenous gas in place. Amongst the discoveries made around the country, the Dorado reservoir exhibits high quality with a clean, thick deposition. In order to assess the feasibility, the reservoir potential was reviewed and production and supply profiles of NG were analysed by acquiring data regarding local demand quantities. A cost benefit analysis of establishing a urea plant was prepared with the involvement of a German organization. Previously identified economical quantity and price was applied to the Fiscal Regime for the Dorado reservoir with the assistance of PRDS and three case scenarios were proposed. The cases involve developing NG by the investing company with the most economical gas rate identified,i.e., 70 MMScf/d, where around 20 MMScf/d of it will be utilized to manufacture urea. The excess production of NG will either be sold to the government or integrated to a power plant, which is preferred as it introduces additional benefits to the economy. Further analysis can be made depending on different modes and methods of transporting NG and locations of the plants which can manipulate the costs with better focus on achieving higher yield.