GAIL mimics Reliance on plans for US ethane

20 Feb 2023 , 09:19 AM

The largest gas company in India, GAIL, is intending to import ethane from the US to replace natural gas and naphtha as feedstock at its petrochemical units, copying Reliance Industries Ltd.

The company stated in a tender document that it was aiming to purchase ethane from nations with an excess of the fuel and developed export terminal infrastructure through waterborne transportation to India and then transport it further through GAIL’s pipeline networks to demand centres.

It requested quotations for a 20-year contract starting in the middle of 2026 to hire a very large ethane carrier (VLEC) to import ethane from the US. The ship, which can carry between 80,000 and 99,000 cubic metres of ethane, is intended to pick up cargo at the American ports of Marcus Hook, Nederland, Morgan’s Point, or Beaumont and deliver it to Dahej, Hazira, or Dabhol in Gujarat or Maharashtra.

GAIL is aiming to build another unit at Usar in Maharashtra in addition to its petrochemical facility at Pata, close to Kanpur in Uttar Pradesh. Because the government shifted gas supplies from the plant to municipal gas suppliers, the firm had to reduce operation rate at Pata. This had an effect on its profitability, thus the company is now exploring to add ethane as a feedstock supplement.

Reliance began importing the US feedstock in 2017 after announcing ambitions to produce ethane in 2014. Six VLECs are used to transport the 1.6 million tonnes of ethane it imports annually to India.

Reliance is said to have saved roughly USD 450 million per year by switching to ethane from propane and naphtha used in the manufacturing of ethylene.

Ethane decreased Reliance’s use of naphtha by 5,000 tonnes, allowing those tonnes to be exported. Reliance utilised 2.5 million tonnes of naphtha annually as feedstock in petrochemical crackers.

Because of the shale gas revolution, which has produced an abundance of liquefied natural gas (LNG) and liquefied petroleum gas, ethane production in North America is anticipated to increase significantly (LPG). It primarily serves as a petrochemical feedstock for the steam cracking process that creates ethylene.

Ethylene serves as the raw ingredient for the production of a variety of goods, including packaging films, wire coatings, squeeze bottles, plastics, and synthetic rubber.

At its crackers in Nagothane in Maharashtra, Dahej and Hazira in Gujarat, Reliance employs ethane.

In the tender, GAIL stated that it is considering co-transporting LNG and ethane in the same vessel but loaded in different compartments.

The 20-year charter hiring contract may be extended by a further five years, according to GAIL.

Expressions of interest (EoI) for the provision of VLECs must be submitted by February 25.

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