India's SAIL to Build Two Oxygen Units at the Bhilai Steel Plant in Madhya Pradesh

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Researched by Industrial Info Resources (Sugar Land, Texas)--India's state-operated steel-making company Steel Authority of India Limited (BSE:500113) (SAIL) (New Delhi) is planning to build two oxygen units, with capacities of 1,250 tons per day each, at the company's steel plant in Bhilai, Madhya Pradesh. The cryogenic air separation units will be set up by Praxair India Private Limited (Bangalore, Karnataka), which will execute the project on a build, own and operate basis. Praxair India is a wholly owned subsidiary of industrial gas supplier Praxair Incorporated (NYSE:PX) (Danbury, Connecticut).

The air separation units are due to be operational by 2012 and will comprise liquefaction infrastructure to separate argon, nitrogen and oxygen, all three of which fulfill critical requirements at production facilities. The new units are likely to provide Praxair with access to the industrial markets of central India.

SAIL is implementing the third phase of the company's expansion and modernization operations at the Bhilai steel plant (BSP), at an estimated investment of $3.8 billion. The exercise is aimed toward increasing the hot metal output of the facility to 7.5 million tons per year, from the present value of 5.3 million tons per year. Crude steel output from BSP is likely to be ramped up to 7 million tons per year, while the capacity of saleable steel will grow to 6.53 million tons per year. The air separation units will cater primarily to the capacity expansion of BSP.

The expansion and modernization plans of BSP include a new 4,060-cubic-meter blast furnace, which on completion will be the biggest in the country; a 7-meter-high coke oven battery; and a sinter machine. Existing coke oven batteries and furnaces will be upgraded to improve the performance of the units. BSP also will replace the conventional ingot production process with a totally continuous casting plant with the addition of a 4 million-ton-per-year steel melting shop.

In addition to the above facilities, BSP will house a new 1.2 million-ton-per-year universal beam mill, which will have a capacity to produce beams with depths up to one meter, and a new bar and rod mill with a 900,000-ton-per-year capacity. BSP, which has the distinction of producing the highest grade of rail steel with less than 1.5 parts per million of hydrogen, has been the primarily supplier of rails to the Indian Railways. The expansion operations will see the addition of a new 1.2 million-ton-per-year universal rail mill at BSP. New plants have been planned for handling coal and iron ore. A compressed air system and the 3,000-ton-per-day oxygen plant are part of the expansion operations.

The expansion plans, however, have run into several problems in contracts, pricing, coal feed and manpower. Due to be completed in 2010-11, the exercise is likely to be delayed by at least a year.

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