Delays at yet another cracker project

By Malini Hariharan

The blog is hearing about fresh delays at ONGC Petro-Additions Ltd’s (OPaL) cracker project at Dahej on the west coast of India.

Conceived a few years back, the dual-feed 1.1m cracker project, based on ethane separated from LNG and naphtha supplied by parent ONGC, has been jinxed from the start. There have been plenty of delays in issuing tenders and awarding contracts as well as a sharp rise in project cost.

The gas separation plant was completed in 2008 well ahead of the cracker.

The construction contract for the cracker was finally awarded to Linde and Samsung Engineering in December 2008 and technology for a swing linear-low density polyethylene (lldPE)/ high-density PE (hdPE) and a polypropylene plant was selected in February 2010.

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Pic source: Samsung Engineering

Work on the cracker has started but construction contracts for downstream units have yet to be awarded. So the company now faces a situation where the cracker is likely to be completed at least six months ahead of the derivative units.

The company is holding on to a start-up date of Q1 2013 but sources associated with the project believe there is little chance of this deadline being met.

“There is a serious delay,” said one source. A tender for the downstream units was issued recently but the earliest that this can be settled is Q2 2011, he said.

“We are approaching the Christmas holiday season; plus there are plenty of questions from potential contractions that need to be answered,” he added.

He pointed out that the company has also not completed technology selection for an hdPE plant.

OPaL, which has been promoted by ONGC, Gail (India) and Gujarat State Petroleum Corp (GSPC), is one more in long list of Asian and Middle Eastern projects that are unlikely to meet start-up schedules.

And every delay increases the probability of the supercycle theory coming true.

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