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GAIL India lines up Rs 50,000-cr capex for petrochemicals segment

GAIL (India) plans to invest up to Rs 50,000 crore to build a 1.5 million tpa ethane cracking unit at Sehore in Madhya Pradesh. The new facility is expected to help the natural gas company’s meet the domestic petrochemicals’ demand. This is among the biggest proposed capital expenditure by the gas utility, as it banks on the  segment. 

The facility is in the planning stage and would nearly double Gail’s existing 810 KTA (thousand tonne per annum) petrochemicals facility in Pata near Kanpur in Uttar Pradesh. It is likely to come up in the next five to six years. Besides, Engineers India is working on the detailed feasibility report for the project. GAIL intends to import ethane, as a petrochemical feedstock and transport it through its pipeline systems to demand centres.

This March, the company signed a tripartite memorandum of understanding (MoU) with ONGC, and Shell Energy India to explore opportunities for imports. The MoU would also explore the development of evacuation infrastructure at Shell Energy Terminal, Hazira. GAIL is also diversifying its petrochemicals business by entering the polypropylene business.

As India’s annual petrochemical consumption could nearly triple to 80 million tonne by 2040, Indian refiners are boosting its petrochemical production capacity. Bharat Petroleum Corporation (BPCL) is also investing close to USD six billion to develop an ethane-fed cracker at its Bina refinery in Madhya Pradesh.

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