State-run oil and gas majors Bharat Petroleum Corporation (BPCL) and Gas Authority of India (GAIL) have signed a 15-year contract for supply of propane, a critical petrochemical feedstock.

“The 15-year supply contract, estimated at a value of over Rs 63,000 crore, will see BPCL providing GAIL with 600 kilo tonnes per annum (KTPA) of propane from its LPG import facility at Uran, which is presently capable of handling 1 million tonnes per annum (MTPA) of LPG imports and is undergoing expansion to accommodate 3 MTPA of propane and butane imports, reaffirming BPCL’s commitment to meeting the growing needs of the Indian petrochemical industry,” BPCL said on Tuesday.

The propane will be supplied to GAIL’s propane dehydrogenation (PDH)-polypropylene (PP) project in Usar, Maharashtra, it added.

GAIL’s Usar PDH-PP project represents the inception of India’s inaugural PDH plant, which is set to commence operations in 2025. The unit will boast capacity of 500 KTPA, with propylene production integrated into a PP plant of equal capacity.

This venture aligns with the surging demand for polypropylene, which is projected to reach 6.3 million tonnes by 2025, up from 4.9 million tonnes in 2020.