The Hindu Business Line : GAIL in talks to pick 26% in Ennore project

"We have opened dialogue with the Birla group for taking a leading role in setting up the 5-million tonne capacity LNG terminal-cum-power project at Ennore," the GAIL Chairman and Managing Director, Mr Proshanto Banerjee, told news persons here today.

The Dakshin Bharat Energy Consortium (DBEC), comprising Grasim Industries (an A.V. Birla Group company), CMS Energy, Unocal, Woodside Petroleum and Siemens Project Ventures, had been awarded the letter of intent (LoI) for the project after a global bidding around four years ago. However, the project did not take off for want of payment and demand security.

Against the current allocation of 6 million standard cubic metres per day (mmscmd) of gas, only 1.4 mmscmd was being supplied in Tamil Nadu. The current deficit of 4.6 mmscmd is besides the 25-30 mmscmd potential customers in industry, power and desalination plants.

According to Mr Banerjee, the declining domestic gas supply outlook and the deep-water port at Ennore was compatible for LNG imports. Besides, LNG could be sourced from multiple countries such as Malaysia, Indonesia and Australia.

GAIL plans to lay a pipeline connecting Coimbatore-Erode-Salem- Dharmapuri besides the Chennai-Bangalore and Chennai-Tuticorin lines planned to transport Regassified-LNG, officials said.

There is an existing local network of 163 km (Kutralam, Narimanan, Kovilallapal, Perungulam, Bhuvanagiri).

GAIL plans to invest Rs 10,723 crore in putting up petrochemical plants in the southern and eastern regions, according to Mr Banerjee.

"We are planning a Rs 7,000-crore naphtha-based petrochemical complex in Kasargod district near Kochi and a Rs 2,500-crore Assam Gas Cracker project," he said.

The Kochi plan would produce 800 kilo tonnes per annum of ethylene and 400 kilo tonnes of propylene.

GAIL has also prepared a pre-feasibility report for the Assam Gas Cracker that will produce 160,000 tonnes per annum of ethylene and a downstream unit of 160,000 tonnes per annum of LLDPE/HDPE.

It has already signed an MoU with Haldia Petrochemicals Ltd for setting up a joint venture styrene butadine rubber (SBR) plant involving an investment of Rs 500 crore.

GAIL has also signed a technology agreement with Mitsui Chemicals Inc of Japan for setting up a dedicated high-density poly-ethylene (HDPE) plant with a capacity of 100,000 tonnes per annum at its petrochemical complex at Pata in Uttar Pradesh. "The project with an estimated cost of Rs 647 crore is scheduled for completion by April 2006," he said.

The company plans to set up a Rs 800-crore coal gasification project in the eastern region with a capacity of 2,000 tonnes per day, according to Mr Banerjee.

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