GAIL, IOCL ink MoU for cooperation in Petrochemicals

GAIL (India) Limited and Indian Oil Corporation Limited (IOCL) today signed a Memorandum of Understanding (MoU) for cooperation in the area of Petrochemicals to collaborate for exploring the possibility of setting up of cracker complex including downstream derivatives at Barauni. Dr. U. D. Choubey, Chairman and Managing Director, GAIL and Shri Sarthak Behuria, Chairman, IOCL signed the MoU in presence of Shri R.S. Pandey, Secretary, Ministry of Petroleum and Natural Gas. Present on the occasion were Shri R. K. Goel, Director (Finance), Shri Santosh Kumar, Director (Projects), Shri B. C. Tripathi, Director (Marketing), Shri Arun Singhal, Chief Vigilance Officer from GAIL and Shri B.M. Bansal, Director (Planning & Business Development), IOCL.

A Joint Working Committee consisting of two representatives from each Company shall be formed for undertaking techno-economic feasibility study of the project including feedstock (naphtha and natural gas) management.

GAIL shall assess the prospect of natural gas availability from the KG basin field including the potentiality of the rich gas to be used as part of the feedstock for the Project and work out the modality for distribution of the same from KG basin field to the Project site. GAIL will subsequently develop appropriate definitive agreement for supply of the gas to the joint venture, once formed.

IndianOil shall assess the prospect of availability of off-gas and naphtha not only from Barauni refinery but also from other operating refineries of IndianOil, to be used as predominant feedstock for the said Project and work out the modality for positioning of the same to the Project location. IndianOil will subsequently develop appropriate definitive agreement(s) for supply of the feedstocks to the joint venture, once formed.

The polymer market is growing rapidly in India and the growth rate registered in the recent times has been significant. There is a potentiality for considering a mixed feed cracker complex based on Naphtha and natural gas at Barauni based on the raw materials available from Barauni refinery and other nearby refineries, besides the prospect of natural gas source in Eastern region, resulting in availability of prospective feedstock for the cracker complex.

India is amongst the fastest growing petrochemicals markets in the world. Taking this into consideration and to enhance its downstream integration, IndianOil and GAIL are focusing on increasing their presence in the domestic petrochemicals sector besides the overseas markets through systematic expansion of customer base and innovative supply logistics.