GAIL to Double Pata Polymer Plant's Capacity

---

Researched by Industrial Info Resources (Sugar Land, Texas)--State-controlled GAIL (India) Limited (BSE:532155) (New Delhi), which has a current market share of 20% in the Indian polymer industry, will ramp up production capacity of high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) at the company's Pata (Auriya) petrochemical plant. Production capacity will rise from 450,000 tons per year to 900,000 tons per year by 2014-15.

The $1.8 billion expansion will have a new 400,000-ton-per-year ethylene unit and a 450,000-ton-per-year HDPE and LLDPE unit, which will use natural gas as feedstock. The engineering, procurement and construction (EPC) contractor for the expansion will be Engineers India Limited (BSE:532178) (New Dehi). The Shaw Group Incorporated (NYSE:SHAW) (Baton Rouge, Louisiana) has been selected to provide proprietary technology and basic engineering for the ethylene unit. The expansion will take place on the existing site and is currently at the stage of preliminary engineering, with bids being floated for the equipment and services needed. Construction is expected to begin in the last quarter of 2012.

The Pata Plant is the only HDPE/LLDPE plant in Northern India and caters primarily to the domestic market, for which 16% of the polymer requirement is met through imports. The current per capita consumption of all polymers (PCC) in India is 8 kilograms, which is extremely low in comparison with countries such as China (36 kilograms) and Brazil (32 kilograms). However, PCC consumption is expected to double in the next five years, triggering a huge domestic demand, which is why GAIL is doubling capacity.

GAIL's petrochemical business accounts for 33% of its profits, although its revenue share in the market is proportionately lower. The company benefits from the use of natural gas as feedstock, which has better cost economics, despite being poorer in terms of efficiency when compared to the more commonly used naphtha feed. GAIL is also looking to extract economies of scale by increasing its production capacity.

View Plant Profile - 1041935
View Project Report - 300017272 300017273 300017279

Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. IIR's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.