In a significant move to secure availability of feedstock for its petrochemicals production, GAIL (India) Limited yesterday signed an agreement with Bharat Petroleum Corporation Limited for 15-year supply of Propane for its upcoming petrochemical plant in Usar, Maharashtra.

The agreement was signed here in the presence of Sukhmal Jain, Director (Marketing), BPCL and Sanjay Kumar, Director (Marketing), GAIL by Kamlesh Sharma, Executive Director (Marketing Retail), GAIL and D. V. Mamadapur, Executive Director (LPG), BPCL.

The 15-year supply contract, estimated at a value of over Rs. 63,000 crore, will see GAIL procuring 600 KTPA of Propane from BPCL’s LPG import facility at Uran, which is presently capable of handling 1 MMTPA of LPG imports and is undergoing expansion to accommodate 3 MMTPA of propane and butane imports.

The strategically positioned GAIL's PDH-PP project in Usar, Maharashtra, will be India's first propane dehydrogenation (PDH) plant, which is likely to commence operations in 2025. The PDH unit will boast a nameplate capacity of 500 KTPA, with propylene production seamlessly integrated into a polypropylene (PP) plant of equal capacity.

This pioneering venture aligns perfectly with the surging demand for polypropylene, which is projected to reach 6.3 million tons by 2025, up from 4.9 million tons in 2020.