GACL finds ally in ONGC

Gujarat Alkalies and Chemicals Limited (GACL), which struggled for almost half a decade with RIL on the ethylene dichloride (EDC) project, has now turned to ONGC as a potential partner for the project.

GACL is planning to establish an EDC plant in the petrochemicals complex being set up by ONGC at its upcoming SEZ at Dahej in south Gujarat.

When contacted, G Mohapatra, managing director, GACL told Business Standard, "We are considering the EDC project in Dahej SEZ of ONGC." He however refused to comment any further on the project.

The project is expected to cost around Rs 150 crore. It will use chlorine from GACL's Dahej plant and ethylene that would be produced by the duel feed cracker of ONGC being set up as a part of the petrochemicals complex at Dahej SEZ.

GACL and Reliance Industries worked together for almost half a decade on establishing the EDC project based on ethylene from Reliance's Hazira plant and chlorine from Dahej plant of GACL as feedstock.

The proposed project however failed to take off for various reasons, including a substantial drop in the EDC prices worldwide around 2002-03. GACL is also expected to pick up equity in the petrochemical project of ONGC, which currently has Gujarat State Petroleum Corporation as the only equity stake holder with 5 per cent equity.

ONGC is planning to rope in Japanese major Mitsui and Mitsubishi as equity partners. EDC, obtained through the chemical reaction of chlorine and ethylene, is a crucial raw material for the manufacture of poly vinyl chloride (PVC).

Currently, GACL supplies chlorine from its Baroda plant to the IPCL plant next door for manufacturing PVC. Under the terms of their joint venture, the company is expected to supply EDC to ONGC for PVC manufacturing facility which may eventually become a part of the ONGC petrochemical complex.

The 1.2 million tonnes capacity petrochemical complex has downstream products which will facilitate the PVC project. The downstream products of the Rs 13,500 crore petrochemical complex of ONGC include HDPE unit with 300,000 MTPA capacity, PP with 340,000 mtpa capacity, LLDPE/HDPE unit with 720,000 mtpa capacity styrene butadiene rubber (SBR) with 140 000 mtpa capacity as primary product units.