GAIL to set up cracker units in Assam, Kerala

GAIL India, which earned 10 per cent of its total sales revenue from petrochemical business last fiscal, has decided to set up two new petrochemical plants in Assam and Kerala.

GAIL has already initiated the process of preparing detail feasibility reports (DFRs). GAIL has also initiated the process of expanding its existing petrochemical complex at Pata in Uttar Pradesh in two stages which will lead to significant increase in its linear low density polythylene (LLDPE) and high density polythene (HDPE) production in two-three years.

"GAIL has decided to set up two new plants exclusively for its petrochemicals business and DFRs in this respect are being prepared now. Following the reports, we will be able to decide the timeframe of completing the construction work on the plants. We are considering two places in Assam, Dhuliajan and Shivsagar, while a naptha-based cracker plant will be set up at Kochi," B S Negi, director (technical), told Business Standard here on Tuesday.

GAIL is also looking at options of using gas for the Kochi plant from Petronet LNG, in which GAIL is one of the major shareholders.

Declining to comment on the investment, Negi said, "The investment will be decided once the DFRs are completed and we also get a clear picture of government subsidies we may get for the cracker plant in Assam."

On the Company's plan to expand capacities at its Pata plant, Negi said, "We are expanding the petrochemical complex at Pata in two stages as in the first stage the LLDPE/HDPE plant is being de-bottlenecked to increase its capacity from 1,60,000 tonne per annum (TPA) to 2,10,000 TPA at a cost of Rs 76 crore. The debottlenecking in the first phase will increase production capacity at the Complex by 20 percent and we expect to complete the de-bottlenecking in April, this year."

In the second stage of expansion, GAIL will increase the ethylene capacity at the Pata complex to 4,40,000 TPA from 300,000 TPA by increasing the number of cracker furnaces from four to five.

"GAIL has chalked up a plan to increase the polymer capacity by setting up an additional LLDPE/HDPE of 1,20,000 TPA. The entire project cost for this phase has been estimated at Rs 6.47 billion and the second phase of expansion work is expected to be completed during 2006-06," he added.

The Pata complex of GAIL, which produces LLDPE and HDPE, is the only petrochemical plant located in north-central India and the Complex has a production capacity of 260,000 TPA of polyethylene, 11,000 TPA of propylene and 10,000 TPA of butene.

GAIL's petrochemical complex comprises a gas sweetening unit, a C2/C3 recovery unit, a gas cracker and two downstream polyethylene units and the installed capacity in the downstream polymer units is based on 7,500 operating hours a year.