GAIL readying plans to leverage Haldia

After emerging the chosen partner for Haldia Perochemicals Ltd, GAIL India Ltd is exploring possible synergies with the company.

It is studying the possibility of producing synthetic rubber at Haldia and delivering natural gas as the feedstock for fresh capacity. At the moment, Haldia used naphtha as a feedstock.

"In the next 4-5 years, we are looking at bringing some natural gas to east India. Some of it can be used at Haldia," GAIL India chairman Proshanto Banerjee told Business Standard.

When asked it would be the gas recently struck by a consortium in which GAIL is participating in Myanmar, Banerjee said that it could also be from a block in the Bay of Bengal, which it is developing jointly with Gazprom of Russia.

"We have done a seismic study and the results are interesting. In February, we will do a 3-D survey and post-monsoons, we ill start drilling," he said.

Talking about the possibility of making synthetic rubber at Haldia, Banerjee said that there is a fairly good demand for the product, especially from the tyre industry, while there is hardly any indigenous product. "We are studying the areas where we can work together," he added.

GAIL India is also likely to see a rise in business with the government clearing the Long Term Fertilizer Policy which has stipulated that all fresh urea capacity in the country would use natural gas/LNG as a feedstock and not naphtha/furnace oil or LSHS.

It has also provided for the conversion to existing naphtha/furnace oil/LSHS-based units to natural gas/LNG-based units.

"Right now, about 40 per cent of our total gas goes to the fertiliser sector. It could now go up by another 20 per cent," Banerjee said.

He added that GAIL India was in a position to reach natural gas/LNG to these urea plants with a minimal investment.

"As far as GAIL India is concerned, we will be ready with the pipeline at their doorstep with not much investment in terms of time or money. It is for the units to decide when they want to switch to natural gas," Banerjee said.

GAIL India currently has ten blocks under exploration with two more under NELP 4. Meanwhile, the company has also sought the government's permission to participate in two more blocks in Myanmar (A2 and A3).