The Hindu Business Line : GAIL-Iran co gas cracker project economically viable: Report

The project is expected be completed in 3-4 years after the joint venture is set up.
In the gas cracker venture, GAIL would be looking at 50 per cent stake.
The project will be based on ethane as feedstock for producing ethylene and downstream polymers.

New Delhi , Feb. 11

A PRE-FEASIBILITY report (PFR) on the proposed one-million-tonne per annum joint venture petrochemical plant of GAIL (India) Ltd and National Petrochemicals Company (NPC) of Iran has shown that the project would be economically viable.

GAIL is now examining the possibility of setting up the joint venture project based on the results of the PFR.

Further activities for preparing a detailed feasibility report (DFR) are being initiated, sources told Business Line.

GAIL has prepared the PFR through consultant Engineers India Ltd, with inputs from NPC.

The proposed location of the complex is South Pars Zone, Assaluyeh (Iran). A project development agreement had been signed between GAIL and NPC in 2005.

The project will be based on ethane as feedstock for producing ethylene and downstream polymers.

Subsequent to the DFR, the joint venture will be formed, sources said.

The project is expected be completed in 3-4 years after the joint venture is set up.

In the gas cracker venture, the company would be looking at 50 per cent stake.

Further, investments in the project that were initially expected to be Rs 7,000-8,000 crore are likely to go up. The proportion of GAIL's investment would depend on the equity structure.

The GAIL-NPC combine would mainly focus on gas cracker. The cracker will manufacture low-density polyethylene, and linear low-density and high-density polyethylene.

The main attraction of the project is the low-cost feedstock that will be available from the South Pars gas fields in Iran, sources said.

Looking at other options: GAIL and NPC are also open to considering other options such as methanol plants and styrene butadiene rubber plants in the long run.

The companies have agreed to consider and evaluate other opportunities such as a methanol plant in the South Pars zone and its extension to an olefin plant.

GAIL has been actively considering expanding beyond natural gas transmission business into petrochemicals, power, liquefied natural gas, exploration and production, and compressed natural gas in India and overseas.

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