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— Kamal Narang

New prospect: Mr U.D. Choubey (left), Chairman and Managing Director, GAIL, with Mr Sarthak Behuria, Chairman, IOC, addressing a press conference in the Capital on Friday.

Our Bureau

New Delhi, Oct. 31 GAIL (India) Ltd and Indian Oil Corporation Ltd (IOCL) on Friday signed an agreement for exploring the possibility of setting up a cracker complex (including downstream derivatives) at Barauni, Bihar. The two public sector undertakings are looking at setting up a Rs 10,000-crore petrochemical plant at Barauni.

During the event, the GAIL Chairman and Managing Director, Mr U.D. Choubey, said “The two PSUs would prepare a techno-economic feasibility study for the unit that would take up to five years for construction.” GAIL and IOC have yet to work out the project structure and equity participation.

“It could be a 50:50 joint venture or it could also be a public-private partnership,” he said. Mr Choubey said the proposed unit at Barauni would be of a minimum 3 lakh tonnes capacity.

The companies would constitute a joint working committee consisting of two representatives from each entity for undertaking techno-economic feasibility study for the project, including feedstock naphtha and natural gas management. GAIL would also assess the prospect of natural gas availability from the Krishna-Godavari basin fields, including the potentiality of rich gas to be used as part of the feedstock for the unit.

IOC would assess the prospect of availability of off-gas and naphtha not only from Barauni refinery but also from other operating refineries of the company, to be used as predominant feedstock for the proposed project.

Mr Sarthak Behuria, Chairman, IOC, said, “Naphtha prices in India and world-over are on a downturn. It is selling below fuel oil as demand is not there. We are forced to export naphtha and the proposed unit will enable us to extract value from the fuel.”

As regards investments in the petrochemical plant, the IOC Chairman said, it had no co-relation with the decision to defer investments in the petrochemical complex that was to come up alongside the Paradip refinery in Orissa.

More Stories on : Alliances & Joint Ventures | Petroleum | GAIL (India) Ltd

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