GAIL, IOC to set up Rs 10,000-crore petrochemical plant

Published: 17 Dec 2008 01:55:55 PST

After teaming-up with Reliance Industries, GAIL recently signed an agreement with refiner Indian Oil Corporation (IOC) to explore the possibility of setting up Rs 10,000-crore petrochemical plant at Barauni in Bihar. The proposed chemical plant will use 2,50,000 tonne of naphtha produced by IOC's Barauni refinery and the natural gas that GAIL plans to bring from eastern offshore and imported LNG through the planned Jagdishpur-Haldia pipeline.

U D Choubey, chairman and managing director, GAIL, said, "We (GAIL and IOC) have signed a memorandum of understanding (MoU) for exploring the possibility of setting up of cracker complex including downstream derivatives at Barauni."     

The two firms by the fiscal year would prepare a techno-economic feasibility study for the unit that would take up to five years for construction.

"Naphtha prices in India and worldover are on a downturn. It is selling below fuel oil (price), as there is not much demand. We are forced to export naphtha and the proposed unit will enable us to extract value from the fuel," said Sarthak Behuria, chairman, IOC.     

A 130-km spur line from Gaya to Barauni would be laid to transport gas to Barauni fertiliser plant, IOC's refinery and the proposed petrochemical unit. Gail’s Jagdishpur-Haldia pipeline would transport gas found in eastern offshore.