12 May 2011 09:50 [Source: ICIS news]
SINGAPORE (ICIS)--The Indian government will subsidise the development of a gas-based cracker in Assam, paving the way for the Indian rupees (Rs) 90bn ($2bn) project to proceed after some delays, a source familiar with the project said on Thursday.
The cracker will produce ethylene and propylene for captive use at its downstream plants – a 220,000 tonne/year polyethylene (PE) plant and a 60,000 tonne/year polypropylene (PP) unit – said the source with project stakeholder, GAIL India.
GAIL plans to target both the domestic and export markets from these new capacities, as demand in northeast India remains small, the source said.
Commissioning of the project will be pushed back to the third quarter of 2013 from April 2012, said the source, adding that the cost of the project had risen by 64% from the initial estimate of Rs54.6bn.
Project funding was secured from a consortium of banks led by Punjab National Bank (PNB), Indian newspaper Business Standard reported on Thursday.
GAIL holds a 70% stake in the project operator, Brahmaputra Cracker and Polymer Ltd (BCPL), the newspaper said.
Additional reporting by Pearl Bantillo
($1 = Rs44.62)
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