Gail, ONGC explore possibility of importing ethane at Shell's Guj terminal

State gas utility GAIL (India) Ltd and oil producer ONGC will explore possibility of using Shell's import terminal at Hazira in Gujarat for importing ethane and other hydrocarbons to fuel their petrochemical ambitions.

GAIL had in May last year signed a memorandum of understanding with Shell Energy India Pvt Ltd to explore opportunities in energy value chain, including sourcing of ethane.

On Thursday, "GAIL, Oil and Natural Gas Corporation (ONGC) and Shell Energy India (SEI) Pvt Ltd signed a tripartite memorandum of understanding (MoU) to explore opportunities for import of ethane and other hydrocarbons and development of evacuation infrastructure at Shell Energy Terminal, Hazira," GAIL said in a statement.

Both GAIL and ONGC are exploring import of ethane from countries such as the US for planned petrochemical plants that are aimed at catering needs for goods ranging from plastics to paints and adhesives in the fast expanding economy. GAIL is looking to build an ethane cracker which will produce ethylene that is required for products such as plastics.

GAIL said it has previously entered into a bilateral MoU with SEI for scouting opportunities in different facets of energy cooperation, wherein a feasibility study was conducted by a reputed consultant on developing ethane import infrastructure in the existing SEI terminal at Hazira.

ONGC has a bilateral MoU with GAIL for importing and handling of hydrocarbons.

"In view of the emergence of ethane requirement in India and proposed development of ethane infrastructure, the three parties ONGC, GAIL and SEI have joined hands," the statement said.

Speaking on the occasion, Rajeev Kumar Singhal, Director (Business Development), GAIL said ethane has emerged as a preferred petrochemical precursor in India and development of its import facilities have gained considerable traction. "Definite plans are being formulated to import ethane for domestic petrochemical plant requirements."

Echoing the sentiment, ONGC group general manager and head of petrochemicals Ashok Kumar said going forward, ethane is the fuel of the future as feedstock to Indian petrochemical industry. "India is adding good petchem capacities , and making available viable and affordable ethane is the key for the plans ahead."

The MoU signed on Thursday includes "cooperation with clear focus for developing ethane import facilities after gap assessment in existing Shell Hazira Terminal facilities and usage of existing pipeline routes and facilities. The MoU signed envisages to foster efficiency and swift progress of the shared project by leveraging the combined strengths of all three parties."

The move coincides with the objective towards assessment of existing operational infrastructure, ensuring its sufficiency, operational flexibility and effective management of upstream and downstream uncertainties.

"The MoU is expected to offer new business prospects to all the parties along with offering diversification of petrochemical feedstock while aligning with the national priorities and Government of India's Atmanirbhar Bharat (Self Reliant India) mission with manufacturing in India," the statement added.