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APR 10 2014

GAIL plans Rs 2,600-cr tyre rubber plant in Gujarat, to take on RIL

  • Economic Times, ET Bureau / Hyderabad
  • Created: Thu 10th APR 2014

Public sector unit GAIL (India) is gearing up to spend about R2,600 crore to set up a poly butadiene rubber (PBR) plant in Gujarat.

Currently, Mukesh Ambani-promoted RIL is the only producer of this rubber - highly elastic and stress-resistant - which it is used to make tyres.

The state-run company has decided to set up a 110,000 tonne-per-year PBR plant at Dahej in Gujarat, which would cost R2,574.45 crore. Of this, R561.52 crore would be borrowed from overseas.GAIL may also consider to rope in ONGC as a joint venture partner for the project, said officials privy to the development. The project is targeted to be completed by the first quarter of FY17.

At present, RIL has a PBR plant in Vadodara that produces about 80,000 tonne per annum. The firm is also in advanced stages of commissioning another 40,000-tonne-a-year plant in Hazira.India's PBR demand is around 160,000 tonne a year, of which half is met indigenously and the rest is imported. The demand for this kind of rubber is expected to grow 6.4% annually in the country.

GAIL would also look at exporting PBR to China and other southeast Asian countries, which are net importers of PBR, the official added.

The raw material (butadiene) required to produce PBR would be sourced from ONGC Petro Additions (OpaL), expected to be commissioned in the current financial year. GAIL is currently in discussions 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.

The public sector company will source technology from Japan's JSR Corporation while Engineers India (EIL) would be appointed as the engineering, procurement and construction management consultant.GAIL India uses rival Shell's Hazira terminal to import first LNG cargo

New Delhi, April 9: In a bid to diversify portfolio, state-owned gas utility GAIL India has imported its first shipload of LNG at rival Royal Dutch Shell's Hazira terminal in Gujarat. GAIL, which part-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. The company previously imported all the LNG it bought from overseas either at Dahej or at Dabhol. "We couldn't import at Dahej since it was facing haulage problem so we decided to use Hazira terminal," a top GAIL official said.

This is the first time since India started importing LNG in January 2004 that GAIL, the nation's largest gas marketing and transmission firm, 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. "If our customers need gas, we are open to using Hazira more often," the official said. GAIL, he said, is also talking to Shell for buying LNG on a short-term contract. "The talks are still on but nothing has been finalised."


Delhi Gujarat Maharashtra Southern Region SR ONGC China Reliance Industries limited Asia Shell Engineers India Ltd Liquefied natural gas Royal Dutch Shell Japan India AIL SR

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