GAIL to implement Rs 5,461 cr gas cracker project

Mumbai, May 24: State-owned Gas Authority of India Limited (GAIL) will implement the Rs 5,460.61 crore Assam gas cracker project under a joint venture.

Announcing this, the company said with the recent approval of the Cabinet Committee on Economic Affairs (CCEA), the project to set-up an integrated petrochemical complex at Lepetkata, in Dibrugarh district of Assam will be implemented by a joint venture company (JVC), to be promoted by GAIL with 70 per cent equity participation.

The remaining 30 per cent equity will be shared equally among Oil India Ltd (OIL), Numaligarh Refineries Ltd (NRL) and the Assam government.

The project will be completed in 60 months from the date of approval.

The project is expected to give rise to a substantial employment generation as a result of investments in downstream plastic processing industries and allied activities. It has been estimated that about 500 plastic processing industries are likely to come up in the North-Eastern region, if this project becomes operational.

Assam government has agreed to grant exemption from entry tax on capital goods, exemption from works contract tax during construction and sales tax/VAT exemption on feed stock, and products for 15 years from the date of commencement of production.

The feedstock for the petrochemical complex is 6.0 MMSCMD (million metric standard cubic meters per day) gas from OIL, Duliajan and 1.35 MMSCMD gas from Oil&Natural Gas Corporation (ONGC) upto March 31, 2012 and 1.00 MMSCMD, thereafter.

The petro complex will also utilize 1,60,000 TPA of petrochemical grade naphtha from NRL.

The site has been identified by the Assam government and necessary environmental clearance has been obtained.

The existing LPG plant of the company at Lakwa will be modified to process gas for recovery of ethane and higher hydrocarbon fraction, which will be transported to Lepetkata through a pipeline.

The Assam gas cracker project is proposed as a part of the implementation of Assam accord signed by Government of India on August 15, 1985. However, the work could not be started due to non-availability of sufficient feed stock and other reasons.

Ministry of Finance decided on February 20, 2003 that the company would examine the feasibility of taking up the project on its own.

UNI