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Mony K. Mathew

Thiruvananthapuram , Dec. 2

GAIL (India) Ltd is in the process of selecting a consultant to undertake a feasibility and market study on its proposed petrochemical complex in Kasargod district of Kerala.

The company has received expressions of interest from a dozen consultants, including Engineers India Ltd (EIL) and Lurgi, to conduct the study, which is expected to start by this month-end, according to State Industries Department officials here.

The study is slated to be completed within three months, and GAIL will examine it at its board meeting some time in June next year, they said.

The Kerala State Industrial Development Corporation (KSIDC) is holding a letter of intent from the Centre for establishing a petrochemical complex in the State. GAIL had signed a gas cooperation agreement, involving a total investment of Rs 10,450 crore, with KSIDC in July and the petrochemical project is the centrepiece of the agreement.

KSIDC had got a feasibility study done by EIL in 2001, which proposed a naphtha cracker for production of ethylene, polypropylene, benzene and LDPE, among other things, at an estimated project outlay of Rs 7,000 crore. The study had also projected significant demand-supply gap for the products beyond 2007-08.

A detailed market survey was also done at that time by the Delhi-based Industrial Development Services. The survey, based on end-use method, had also established the scope for the project.

The officials said GAIL is now looking at the possibility of setting up a dual-feedstock facility for cracking gas as well as naphtha. The proposal is to install an `extractor' at the upcoming LNG terminal in Kochi to separate heavy gas and bring it to the project site through a pipeline.

As for naphtha, the other feedstock, GAIL plans to source it from Kochi Refineries to the extent possible and import the balance requirement. As the seacoast is just 20 km away from the project site, a jetty could be constructed for importing naphtha.

The officials said a dual-feedstock facility would mean a higher project outlay than originally estimated. There would also be change in the product-mix.

The State Government has already identified more than 1,000 acres of land at Cheemeni in Kasargod district for establishing the complex. And if required, more land could be brought under the project, said the officials.

More Stories on : New Projects | Petrochemicals | Petroleum

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