By Ajoy K Das
KOLKATA (ICIS)--Indian gas transportation and logistics major GAIL India Limited is planning to invest $6.42bn (€4.81bn) over the next three years to build new projects in the petrochemicals and fertilizer sectors, a company official said on Monday.
About half the planned investment will be used to build a naphtha-based petrochemical plant while other projects under consideration include those in the fertilizer sector as well as the construction of new production facilities across the country, the official said.
For all the proposed investments, GAIL will be scouting for Indian and foreign joint venture partners in respective industrial sectors, the official said.
Meanwhile, GAIL is now in talks with government-owned oil refiner and marketer, Hindustan Petroleum Corporation Limited (HPCL), to revive a stalled $5.13bn petrochemical project which the two companies had planned six years ago at the Petroleum, Chemicals, Petrochemical Investment Region (PCPIR) being built at Vishakhapatnam in the southern Indian province of Andhra Pradesh, he said.
The petrochemical venture between GAIL and HPCL was earlier put on hold because of difficulties in project financing and a lack of interest from overseas investors, according to the official.
Both GAIL and HPCL have been in touch with foreign firm such as France’s Total and BP to team up and revive the stalled petrochemical project, the official said, adding that location of the projects will likely have to change.
Separately, GAIL have begun to evaluate opportunities in fertilizer production as part of its plans to diversify its portfolio, according to the official.
Any new fertilizer project that the firm aims to be involved in will be done through a joint venture in which the principal partner is like to be an India-based company with fertilizer production as its core business, he said.
GAIL will leverage its experience in production and handling of the feedstock end like liquefied natural gas or supply of ammonium synthesis gas (ASG) from coal gasification plants, the official said.
The fertilizer projects will be modelled after GAIL’s venture with Rashtriya Chemicals and Fertilizer Limited (RCFL) to revive a defunct fertilizer plant at Talcher in eastern India for production of urea and ammonium nitrate, he said.
GAIL, through a minority stake in the venture with RCFL, will operate the coal gasification plant to ensure feedstock supply while TCFL will operate the fertilizer plant, the official added.
($1 = €0.75)
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