Indian gas-based ethylene project takes step forward

The sagging economy of India's northeastern state of Assam is expected to get a major boost, with preliminary work on a 44 billion rupee ($1 billion) gas cracker project expected to be launched by mid-August.


MUMBAI�The sagging economy of India's northeastern state of Assam is expected to get a major boost with preliminary work on a 44 billion rupee ($1 billion) gas cracker project expected to be launched by mid-August.

Reliance Assam Petrochemicals Ltd. (RAPL)�a joint venture of Reliance Petrochemicals (India's largest petrochemical company) and Assam Industrial Development Corp.�says it is moving forward with plans to build a 300,000 tonne/year olefins plant at Lepetkata in the eastern district of Dibrugarh, about 550 km from the capital city of Guwahati.

"The project, when it [starts] up, will transform the state into a major industrial player having the potential to alter the economic graph of Assam," said Gunin Hazarika, industry minister for Assam state.

Oil India Ltd. (OIL), one of India's main oil and gas concerns, and RAPL are expected to sign a feedstock supply agreement within the next few days, paving the way for initial survey work. The agreement, by which OIL will supply ethane feed to RAPL for a period of 15 years, thus far has been the major stumbling block in project negotiations.

The foundation stone for the project was laid as far back as in 1995 by then Prime Minister P.V. Narasimha Rao. But crackers in India are typically fed on naphtha rather than ethane, which, as a component of natural gas, is harder to secure in adequate quantities.

The project should be completed in about 44 months after the date of signing of the gas pact and completion of procedures, described as "formalities," regarding possession of land.

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