Reliance Petro, Dow pact gets nod

Polypropylene plant to be set up at Jamnagar special economic zone.

The department of chemicals and petrochemicals has approved Reliance Petroleum Ltd's application for a foreign technology collaboration agreement with Dow Global Technologies for setting up a polypropylene plant at the Jamnagar special economic zone.

The agreement will be valid for 10 years and Dow Global Technologies will be paid $26.55 million in four instalments for the plant.

"The plant will be located at Meghpar village near Lalpur in Gujarat and will have a capacity of 9 lakh tonnes per annum. The technology offered by Dow Global Technologies is UNIPOL-PP using UNIPOL fluidised gas process," government officials told Business Standard.

There is also an option of installing a catalyst plant along with solvent recovery unit with an initial capacity of 100 TPA. Further, there is a provision of expanding the capacity up to 300 TPA by adding two more plants, each having a capacity of 100 TPA.

The technology major will receive a payment of $14 million for the catalyst technology and $5.2 million for the solvent recovery plant. Dow will receive the payment in four tranches.

The company will receive 25 per cent of the total payment after signing the licence agreement, the next 25 per cent upon delivery of the process design package, while the subsequent payments of 25 per cent each will be made after the completion of the operations, training and commissioning of the plant.

Reliance already has plants at Hazira and Jamnagar with a capacity of 10.40 lakh TPA.

Dow Global Technologies hold the proprietary rights for the catalyst technology and is a subsidiary of Dow Chemical Company. Dow Chemicals has also shown interest in the development of petro conclaves, proposed to be spread over 5,000 acre.