GAIL plans feasibility of cracker plant

GAIL India's ambitious Assam gas cracker complex has gained momentum with the company ready to commission a detailed feasibility study (DFS) for the Rs 2,500 crore project.

The company plans to set up a petrochemical complex with capacity of 200,000 tonne per annum (TPA) with Assam Industrial Development Corporation (AIDC) as a partner.

"The tendering process for selecting the consultant to carry out a DFS is in the final stage and the contract will be awarded soon," a GAIL source said.

GAIL had commissioned EIL to carry out a pre-feasibility study of the project.

The study had firmly established the techno-commercial viability of setting up a 2,00,000 tone per annum gas-based petrochemical complex.

The viability of the project is, however, subject to number of concessions the Centre had promised for the project.

GAIL wants customs duty waiver on imported pipeline, excise duty concession on equipment and supply and also duty exemption on finished product.

"We have conveyed to the ministry of petroleum and natural gas that with the concession package agreed to by the Government of India earlier, the internal rate of return (IRR) of the project is acceptable.

The supply of natural gas feedstock over the next 15 years, mainly from Oil India Limited (OIL), also needs to be assured," the sources added.

However, the company is also looking at the feasibility of augmenting the supply of natural gas feedstock to the complex with import of natural gas from Myanmar through the proposed Myanmar-India gas pipeline.

It can be recalled the project was conceived in 1985 when the Assam Accord was signed between the Centre and the Asom Gana Parishad.

As a part of the package, the Assam Gas Cracker Project was announced.

Thereafter, in June 1991, a letter of intent issued to the Assam Industrial Development Corporation for setting up a gas based petrochemicals complex with 300,000 tonnes per annum capacity of ethylene, which was subsequently revised to 200,000 tonne per annum.

In February 2003, ministry of finance reopened the issue and GAIL, which has 310,000 TPA petrochemical complex in Pata, Uttar Pradesh, was advised to look into the feasibility of taking up the project on its own.