Reliance to join GAIL, HPC in petchem project

India's Reliance Industries Ltd. (RIL) likely will join public sector gas distributor GAIL India Ltd. and refiner Hindustan Petroleum Corp. (HPC) to construct a 1 million tonne/year petrochemical complex in Visakhapatnam (Visag) in India's Andhra Pradesh state.

Shirish Nadkarni
OGJ Correspondent

MUMBAI, Oct. 19 -- India's Reliance Industries Ltd. (RIL) likely will join public sector gas distributor GAIL India Ltd. and refiner Hindustan Petroleum Corp. (HPC) to construct a 1 million tonne/year petrochemical complex in Visakhapatnam (Visag) in India's Andhra Pradesh state.

The capacity of the $1.5 billion plant would equal the total polymer manufacturing capacity of RIL and Indian Petrochemicals Corp. Ltd. (IPCL) together.

RIL built up a capacity of 1 million tonnes after it acquired IPCL from the government in June 2002 and merged with it.

GAIL has an agreement with RIL for building petrochemical plants overseas. "We are looking to extend that agreement to our proposed plant in South India," said GAIL Chairman and Managing Director U.D. Choubey. "The most likely location of the plant is [Visag], with HPCL as the third partner."

RIL executives declined to comment on the proposed 60-billion-rupee petrochemical plant, but an HPCL executive confirmed that a plan to set up a petrochemical plant in Visag was being discussed and that the company is scouting for a partner for the venture.

GAIL, the country's largest transporter and marketer of gas, also is undertaking feasibility studies for building a 3-million-tonne/year petrochemical plant in Iran near offshore South Pars field. RIL is expected to be invited to join the state-run company in that project also.

The Visag petrochemical plant will be built in the proposed Petroleum, Chemicals, and Petrochemicals Investment Region (PCPIR) to be established by the Andhra Pradesh government in the Visag-Kakinada zone. HPCL already has a 7.5 million tonne/year refinery in the area that is being expanded to 15 million tonnes/year.

GAIL operates a 440,000 tonne/year petrochemical plant in Pata, Uttar Pradesh. Construction of another 52-billion-rupee ($1.3 billion) plant is under way in Assam.

GAIL intends to invest 300 billion rupees ($7.5 billion) during its current 5-Year plan (2007-12), of which almost 80 billion rupees ($2 billion) has been earmarked for the petrochemicals sector.

More in Refining & Processing