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GAIL ties up with Haldia Petrochemicals
Friday, 03 January 2003, 20:30 IST
NEW DELHI: India's gas infrastructure major GAIL (India) Ltd. has entered into a strategic marketing alliance with Haldia Petrochemicals Ltd (HPL) for swapping of petrochemical products.
"The alliance is mutually beneficial to GAIL and HPL as both could jointly develop marketing strategy for petrochemical products, which will help them withstand competition from domestic majors as well as multinational petrochemical majors," state-owned GAIL said in a statement Thursday.
The product swapping arrangement is expected to provide synergetic advantage to both the petrochemical majors, as companies will leverage their location advantage for mutual benefits.
Under the arrangement, GAIL will be able to fulfil its ongoing export programme through the Haldia port by marketing HPL's polyethylene and also service its domestic customers in the eastern region without incurring additional freight cost from its landlocked location in Uttar Pradesh.
In exchange HPL would be able to serve its customers located in the northern region by marketing GAIL's polyethylene.
The alliance will see GAIL marketing 35,000 tonnes per annum of polypropylene manufactured by HPL. In turn HPL, based 130 km from Kolkata in the port town of Haldia, will market 40,000 tonnes per annum of polyethylene produced by GAIL in the domestic market.
The tie-up on polypropylene would increase GAIL's polymer product portfolio without any additional capital investment.
"This would enable GAIL to consolidate its customer base and service them effectively with multiple polymer product portfolio," the company release stated.
GAIL owns and operates a 300,000 tonne per annum (TPA) gas-based petrochemical plant for production of 260,000 tonnes per annum of linear low-density polyethylene (LLDPE) and high-density polyethylene (HDPE) in the Pata district of Uttar Pradesh.
With the plant having exceeded its full production capacity, GAIL is expanding it to the tune of 440,000 TPA of ethylene and 430,000 TPA of polymers. It has an expansion plan of 550,000 TPA of ethylene as well.
Both GAIL and HPL have identified potential areas of business cooperation in petrochemicals and signed a memorandum of understanding to this effect.
Both the companies have also inked an agreement for sale of 35,000 tonnes pentane by GAIL from its liquefied petroleum gas (LPG) recovery unit at Vijaipur and Pata to HPL, enabling it to source feedstock requirements.
Under severe financial stress, HPL has been negotiating with a number of private and state-owned companies for the last few months to inject fresh investment.
Source: IANS
Source: IANS