GAIL plans Rs 2500 cr Assam gas cracker

GAIL India Ltd is going to set up a gas cracker petrochemical project in Assam at an estimated investment of Rs 2,500 crore.

The project is expected to go on stream four years from now with GAIL looking at a joint venture partner to develop it. The task of finding a JV partner is, however, is rested with the Assam government.

Proshanto Banerjee, chairman and managing director of GAIL said: "Government has asked us to look into the feasibility of the project which was conceived long ago as part of the Assam accord. Engineers India Ltd (EIL) has carried out a detailed feasibility report (DFR). This will be a greenfield project using the north east gas."

The development gains significance as the project will boost GAIL's position in Indian petrochemical market dominated by Reliance.

GAIL has a gas cracker complex in Pata, Uttar Pradesh, which is being expanded. Moreover, it is also picking up stake in Haldia Petrochemical Ltd (HPL), another strong player in domestic petrochem industry.

The viability of the Assam project will, however, largely depend on the concessions the company is expecting from the state as well as the Centre.

This is because the north east gas is expected to flow till 2019 and the company needs CST benefits as well as project concessions to make the project viable.