RIL to join GAIL, HPCL for AP plant

Reliance Industries (RIL), the country's largest petrochemical company, may join GAIL India and Hindustan Petroleum Corporation (HPCL) to set up a mega 1 million tonne per annum (mtpa) petrochemical complex in Vishakapatnam.

The plant may cost over Rs 6,000 crore. The capacity of the plant would equal the polymer manufacturing capacity of RIL and Indian Petrochemicals Corporation (IPCL) put together.

RIL has a capacity of 1 million tonnes after it acquired IPCL from the government in June 2002 and merged with itself.

GAIL has an agreement with RIL for setting up petrochemical plants overseas. "We are looking to extend that agreement to our proposed plant in south India. The plant may come up in Vishakapatnam, with HPCL as the third partner," said a senior GAIL official.

RIL executives declined to comment on the Rs 6,000 crore petrochemical plant. An HPCL executive said the plan to set up a petrochemical plant in Vishakapatnam was being discussed. Besides, the company is also scouting for a partner for this venture.

GAIL, the country's largest transporter and marketer of gas, is undertaking feasibility studies for setting up a 3 mtpa petrochemical plant in Iran near the South Pars field. RIL may join the government-owned company in that project.

The petrochemical plant in Vishakapatnam will come up in the proposed Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) in Vishakapatnam. HPCL has a 7.5 mtpa refinery in the area, which is expanded to 15 mtpa.

A PCPIR, anchored around an oil refinery, is a giant investment for petroleum and petrochemical industries. The Andhra Pradesh government has already applied for setting up a PCPIR in the Vishakapatnam-Kakinada zone.

GAIL operates a 440,000 tonne per annum petrochemical plant in Pata, Uttar Pradesh. Another Rs 5,200 crore plant is under implementation in Assam. It had planned to set up a plant in Kochi, which has not taken off.

Petrochemicals is one of the three focus areas of GAIL during the current Five Year Plan. "Pipeline will remain our core business. Other focus areas are the city gas distribution and the petrochemical businesses," GAIL Chairman and Managing Director UD Choubey said recently.

The company intends to invest Rs 30,000 crore during the current Five Year Plan, of which almost Rs 8,000 crore has been earmarked for the petrochemical sector.