Gas utility GAIL plans Rs 2,600-crore tyre rubber plant in Gujarat; to compete with RIL

INDIA'S major gas utility Gas Authority of India Limited (GAIL)  will spend about Rs 2,600 crore to set up a poly butadiene rubber (PBR) plant in Gujarat. The Maharatna PSU has decided to set up a 110,000 tonne-per-year PBR plant at Dahej in Gujarat at the cost of Rs 2,574.45 crore. The PSU will borrow Rs 561.52 crore from overseas market for the purpose .

GAIL may also rope in ONGC as a joint venture partner for the project. The project is likely to be completed by the...

first quarter of financial year 2017.

Currently, Reliance India Limited is the only producer of this rubber — highly elastic and stress-resistant — which it is used to make tyres at its PBR plant in Vadodara that produces about 80,000 tonne per annum.

India’s PBR demand is around 160,000 tonne a year, of which 50 percent is met indigenously and the rest imported. The demand for this kind of rubber is expected to grow 6.4 percent per annum.

Once completed, GAIL will may also export PBR to China and other southeast Asian countries, which are net importers of PBR, said a media report.

The raw material (butadiene) needed to produce PBR would be brought from ONGC Petro Additions (OpaL), expected to be commissioned in the current financial year.

The nation’s largest gas marketing and transmission firm is currently in discussion with OpaL for sealing a long-term contract for procurement of butadiene. OPaL is setting up a greenfield petrochemical project at Dahej.

The GAIL plant would also be designed to process imported butadiene, should there be a shortfall in domestic supplies.

GAIL will source technology from Japan’s JSR Corporation while Engineers India (EIL) would be appointed as the engineering, procurement and construction management consultant.

In a related development, GAIL has imported its first shipload of LNG at rival Royal Dutch Shell’s Hazira terminal in Gujarat. GAIL, which also partly owns Petronet LNG that operates 10 million tonnes Dahej terminal in Gujarat and operates 5 million tonnes a year capacity Dabhol plant in Maharashtra, last weekend imported a cargo of liquefied natural gas (LNG) at Hazira. GAIL earlier imported all the LNG it bought from overseas either at Dahej or at Dabhol. This is the first time since India started importing LNG in January 2004 that GAIL has used a privately operated terminal for imports. The cargo imported at Hazira came from French energy giant GDF Suez which whom GAIL had in 2012 signed a term contract to buy 0.8 million tonnes of LNG.