GAIL Is Planning To Build An Ethane Cracker With An Investment Of USD 4.9 Billion

GAIL Invests USD 4.9 Billion In Building An Ethane Cracker In West India

India's leading supplier of gas, GAIL Ltd (GAIL.NS), is working towards building an ethane cracker worth USD 4.89 billion around its LNG (liquefied natural gas) import plant situated in Western India. The investment arrives as a move to meet the expected rise in petrochemical demand (expected to triple by 2040) as per reports by the leading refiner Indian Oil.

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The country's companies are ramping up the production capacity of petrochemicals since there has been rapid expansion in the economy, which in turn leads to an increase in demand for industrial products, including paints, plastics and adhesives, all of which require ethylene produced in a cracker.

GAIL is on the lookout for land located in Maharashtra's coastal region of Dabhol for the establishment of its cracker project with a 1.5 million tonnes a year (mtpa) capacity for which it will be importing ethane from the United States. Presently, the company has an operational 5 mtpa LNG plant at Dabhol.

The company is looking to import ethane from the US since it wishes to replace its existing feedstocks. The import will take place due to the Indian Government's preference for natural gas etc., which led to a shortage of ethane. Hence, the company issued an Expression of Interest (EOI) for chartering a Very Large Ethane Carrier (VLEC) over the next twenty years, with an additional extension of 5 years.

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According to the article by Procurement Resource, GAIL, India's leading supplier of gas, will be constructing a USD 4.89 billion ethane cracker to ramp up its petrochemicals production, which is vital for the rapidly developing economy, as a result of which the demand for industrial products is also rising. Presently the country's per capita consumption for petrochemical accounts for around one-third of the global average and is anticipated to rise thrice-fold by 2040.