New Delhi: State-run GAIL (India) Ltd., has inked a 15-year agreement with Bharat Petroleum Corp. Ltd. (BPCL) to supply propane for its upcoming petrochemical facility in Usar, Maharashtra.
The deal, worth over ₹63,000 crore, will see GAIL source 600 KTPA of propane from BPCL’s LPG import unit at Uran. This facility, currently with a 1 million metric tonne per annum (MMTPA) capacity, is expanding to handle 3 MMTPA of propane and butane imports.
GAIL’s upcoming Usar-based propane dehydrogenation unit, the nation’s first, is likely to launch operations in 2025. The unit will have a nameplate capacity of 500 KTPA, with propylene production seamlessly integrated into a polypropylene plant of equal capacity.
The project coincides with rising polypropylene demand, anticipated to hit 6.3 million tonne by 2025, according to a statement by GAIL.
The venture is part of GAIL’s diversification strategy. In its annual report for FY23, the company had said that new business initiatives remain at the core of the its strategic outlook for enhancing profitability and market reach.
Earlier this year, India’s largest gas firm had acquired private-sector chemical company JBF Petrochemicals Ltd in bankruptcy proceedings. It has now been renamed GAIL Mangalore Petrochemicals Ltd.
For the quarter ended September, GAIL reported revenue from operations of ₹31,823 crore, compared with ₹32,227 crore in Q1 FY24. Net profit increased 70% sequentially to ₹2,405 crore in Q2 FY24.
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.
On BSE today, shares of GAIL closed at ₹117.70 apiece, down 1.55% from previous close. BPCL stock rose 2.21% to end the day at ₹356.90 per share.
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Updated: 01 Nov 2023, 09:59 PM IST
