Stage-1 of Assam Gas Cracker project commissioned

Plant starts producing ethylene, which will form feedstock for making polymers, the building blocks of plastics

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The first phase of long-delayed Rs 9,285-crore Assam Gas Cracker project, the first petrochemical project in the North East, has been commissioned.

"The cracker, polypropylene (PP) unit, gas processing unit and all utilities have been commissioned," said B C Tripathi, Chairman and Managing Director of GAIL India, the majority stake holder in Brahmaputra Crackers and Polymers Ltd (BCPL) that is building the project.

The plant has started producing ethylene, which will form feedstock for manufacturing polymers that are basic building blocks of plastics, he said.

LLDPE/HDPE unit will be made operational after receipt of ethylene from the cracker plant. "The entire plant will be commission in next two weeks time," he said.

The then Prime Minister Manmohan Singh on April 9, 2007 had laid the foundation stone of the project at Lepetkata, 15 km from Dibrugarh. It was at that time said that the project will take 60 months to complete, i.E. By April 2012.

But the target declines were delayed - first to December 2013, than to January 2014 and to June 2015. The project is finally being commissioned now.

The delay resulted in the project cost going up. From an initial Rs 5,460 crore it was revised to Rs 9,285 crore. Apart from changes in design, escalating costs of steel, cement and other construction materials were cited as the main factors responsible for the hike.

GAIL holds 70 per cent interest in BCPL while the remaining 10 per cent is equally split between Oil India Ltd, Numaligarh Refineries Ltd and the Assam government.

The Centre has approved a capital subsidy of Rs 2,136 crore and a feedstock subsidy of Rs 908.91 crore for a 15 year period for the project with an exemption of excise and income tax for 10 years.

GAIL and BCPL have already signed a deal for marketing petrochemical products sold at the plant.

The petrochemical project will produce various ranges of polymers produced at the plant find applications in sectors such as packaging film, roto, injection, raffia and blow moulding.

"Congratulations to Govt of Assam, GAIL, OIL and NRL for Stage-1 commissioning of Assam Gas Cracker project of BCPL," Oil Minister Dharmendra Pradhan tweeted. "Once fully operational this 1st ever petrochemical project in Northeast at Rs 10,000 crore will produce 2,80,000 MT of feedstock for downstream industries."

The project came as a part of the historic Assam Accord signed on August 15, 1985 with a view to bring socioeconomic development of the region. It was approved by the Cabinet Committee on Economic Affairs (CCEA) on April 18, 2006.

Subsequently a joint venture company, BCPL was incorporated on January 8, 2007.

The feedstock for the project will be natural gas and naphtha. OIL and ONGC will supply natural gas and naphtha shall be supplied by NRL.