GAIL (India) Limited and Indian Oil Corp. Ltd. (IOCL) on Oct. 31, 2008, signed a memorandum of understanding (MoU) to jointly explore the possibility of setting up a mixed-feed cracker complex based on naphtha and natural at Barauni in India's Bihar state. The estimated $2-billion petrochemical plant would cater to India's growing polymers market and the ready availability of naphtha and natural gas from domestic sources.
As a result of the MoU, GAIL and IOCL will form a joint working committee consisting of two representatives from each company. The committee will conduct a techno-economic feasibility study of the project, including feedstock (naphtha and natural gas) management.
GAIL will assess natural gas availability from the offshore Krishna-Godavari (KG) basin, including the potential for using the rich gas to be used as part of the feedstock for the project and determining how to distribute the gas from the field to the project site. GAIL will subsequently develop an appropriate definitive agreement for supplying the gas to the joint venture -- once a JV is formed.
IOCL's role in the study will focus on assessing the availability of off-gas and naphtha -- not only from its Barauni refinery but also from its other operating refineries. In addition, the company will investigate the modality for transporting the off-gas and naphtha to the project location. Once a JV is formed, IOCL will develop appropriate definitive agreement(s) for supplying these primary feedstocks for the proposed plant.