GAIL India signs up with Bharat Petroleum

Bharat Petroleum Corp. Ltd. (BPCL) and state-run GAIL (India) Ltd. have signed a 15-year deal for propane supply for BPCL's new petrochemical facility in Usar, Maharashtra.

GAIL would purchase 600 KTPA of propane from BPCL's LPG import business in Uran as part of the transaction, which is valued at more over ₹63,000 crore. Currently capable of handling 1 million metric tonnes per year (MMTPA) of propane and butane imports, this facility is expanding to handle 3 MMTPA.

The country's first propane dehydrogenation facility, built by GAIL and headquartered in Usar, is expected to begin operations in 2025. The production of propylene will be smoothly integrated into a polypropylene plant with an equivalent capacity, and the unit will have a nameplate capacity of 500 KTPA.

According to a GAIL release, the project is in line with the growing demand for polypropylene, which is predicted to reach 6.3 million tonne by 2025.

The project is a component of GAIL's diversification plan. The company stated that new business initiatives continue to be the cornerstone of its strategic vision for increasing profitability and market reach in its annual report for FY23.

Sandeep Kumar Gupta, chairman and managing director, GAIL, said performance during the quarter was constrained due to lower realization in polymers and LPG which are expected to improve going forward. He added that the company has incurred a capex of around ₹4,853 crore in the first half of the fiscal, mainly on pipelines, petrochemicals, equity to joint ventures, among others.