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Friday, October 31, 2008

GAIL-Indian Oil to set up petrochemical plant

NEW DELHI: State-run gas transmission company Gas Authority of India Limited (GAIL) on Friday entered into an agreement with Indian Oil Corporation (IOC) to explore the possibility of setting up a Rs. 10,000-crore petrochemical plant at Barauni in Bihar. The proposed plant will use 2.50 lakh tonnes of naphtha produced by IOC’s Barauni refinery and the natural gas GAIL plans to bring from Eastern offshore and imported LNG through the planned Jagdishpur-Haldia pipeline.

“GAIL and IOC have signed an MoU for exploring the possibility of setting up a cracker complex, including downstream derivatives at Barauni,” GAIL Chairman and Managing Director, U. D. Choubey, told newsmen after inking the agreement here. The two companies would prepare a techno-economic feasibility study for the unit that would take up to five years for construction.

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

A 130-km spur line from Gaya to Barauni would be laid to transport gas to the Barauni fertilizer plant, IOC’s refinery and the proposed petrochemical unit. GAIL’s Jagdishpur-Haldia pipeline would transport gas found in Eastern offshore. GAIL had already announced plans to double its Pata petrochemical plant’s capacity to 8 lakh tonnes in 3-4 years. Mr. Choubey said the proposed unit at Barauni would be of a minimum 3-lakh tonnes capacity.

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