By Malini Hariharan
The Indian project scene continues to see some hits and misses.
Among the projects on track, sources at Gail (India) told the blog last week that expansion of its Pata cracker and a new polyethylene (PE) plant will be completed in Q1 2014.
Mechanical completion is due in December 2013,, while commissioning is scheduled for February 2014.
The new 450,000 tonnes/year swing high-density PE (HDPE)/linear-low density PE (LLDPE) plant is likely to produce around 100,000 tonnes/year of LLDPE. The grade slate is planned to be the same as the current plant.
The company's joint-venture cracker project in Assam, though, continues to be delayed and mechanical completion is now likely to take place only in 2014.
The small 220,000 tonnes/year cracker and derivatives project has been facing many problems including a steep escalation in costs. Lack of experienced people at the site is another problem.
Gail is also looking forward to the start-up of ONGC Petro-Additions Ltd's (OPaL) 1.1m tonnes/year cracker project at Dahej. The joint-venture cracker project includes a 340,000 tonnes/year HDPE unit, a 340,000 tonnes/year polypropylene (PP) unit and two swing HDPE/LLDPE plants, each of 360,000 tonnes/year capacity.
As written by the blog earlier, this project has seen many delays and the earliest that it is likely to start is 2014-15. Construction of the cracker is substantially ahead of the downstream plants, but the commissioning will have to wait as it will be difficult for OPaL to find a ready buyer for such huge volumes of olefins. Additionally, the company is also not building the infrastructure to handle olefin exports.
Gail will have marketing rights to about 38% of the polymer production by OPaL. This includes 400,000 tonnes/year of PE and 130,000 tonnes/year of PP.
Completion of these three projects would raise Gail's total polymer volumes to about 1.7m tonnes in 2015.
The Indian market should be able to absorb a fair bit of these volumes but the company would like to prepare for exports.
Among other projects, HPCL-Mittal Energy Ltd's (HMEL) new 440,000 tonnes/year PP plant is likely to start operations in April. The plant is downstream of a new 9m tonnes/year refinery that is in the process of being commissioned.
Start-up of this plant and Mangalore Refinery and Petrochemicals Ltd's (MRPL) 440,000 tonnes/year plant in H2 would result in higher exports of Indian PP, unless there is a substantial improvement in demand. PP exports from the country are projected to hit 1m tonnes for the year ending 31 March 2012, as demand growth has been lacklustre through most of 2011.
We will review of other Indian projects later this week.