In a groundbreaking development, the state-run GAIL (India) Ltd. has entered into a 15-year pact with Bharat Petroleum Corp. Ltd. (BPCL) to provide propane for its upcoming petrochemical facility in Usar, Maharashtra. The agreement, valued at over ₹63,000 crore, will witness GAIL sourcing 600 Kilo Tonnes Per Annum (KTPA) of propane from BPCL’s LPG import unit in Uran. This unit, currently boasting a capacity of 1 million metric tonnes per annum (MMTPA), is in the process of expanding to accommodate 3 MMTPA of propane and butane imports.
GAIL’s forthcoming Usar-based propane dehydrogenation unit, a pioneering venture for the nation, is poised to commence operations in 2025. This unit will exhibit a nameplate capacity of 500 KTPA, with seamless integration of propylene production into a polypropylene plant of an equal magnitude.
The timing of this project aligns with the burgeoning demand for polypropylene, projected to reach 6.3 million tonnes by 2025, as stated by GAIL.
This venture encapsulates GAIL’s strategic diversification approach, a concept articulated in the company’s annual report for FY23, wherein new business initiatives remain central to enhancing profitability and market reach.
Earlier in the year, India’s largest gas company had acquired the private-sector chemical entity JBF Petrochemicals Ltd. during bankruptcy proceedings, subsequently rebranded as GAIL Mangalore Petrochemicals Ltd.
For the quarter ending in September, GAIL reported revenue from operations amounting to ₹31,823 crore, compared to ₹32,227 crore in Q1 FY24. Notably, net profit surged by 70% sequentially to ₹2,405 crore in Q2 FY24.
Sandeep Kumar Gupta, the Chairman and Managing Director of GAIL, acknowledged that performance during the quarter faced constraints due to lower realization in polymers and LPG, expressing optimism for improved performance in the future. He highlighted that the company had invested approximately ₹4,853 crore in capital expenditure in the first half of the fiscal year, primarily focused on pipelines, petrochemicals, and equity in joint ventures, among other areas.
On the Bombay Stock Exchange (BSE) today, GAIL’s shares concluded at ₹117.70 apiece, marking a 1.55% decrease from the previous closing price. Meanwhile, BPCL’s stock witnessed a 2.21% increase, ending the day at ₹356.90 per share.
