India’s largest gas firm GAIL is imitating Mukesh Ambani-led Reliance Industries Ltd in planning to import ethane from the US to replace natural gas and naphtha as feedstock at its petrochemical plants.
“In a bid towards diversification of the feedstock, GAIL is looking to import ethane from ethane-surplus countries with matured export terminal infrastructure through water borne transportation to India and transport it further through GAIL’s pipeline systems to demand centres,” the company said in a tender document.
It sought quotes to hire a very large ethane carrier (VLEC) for 20 years starting mid-2026 for importing ethane from the US. The ship with capacity of 80,000 to 99,000 cubic metres is targeted to take deliveries from US ports of Marcus Hook, Nederland, Morgan’s Point or Beaumont and deliver ethane at Dahej or Hazira in Gujarat or Dabhol in Maharashtra.
GAIL has a petrochemical plant at Pata, near Kanpur in Uttar Pradesh, and is also looking to set up another unit at Usar in Maharashtra. The company had to cut down on run rate at Pata after the government diverted gas supplies from the plant to city gas suppliers. This led to its profitability being impacted and so now the company is looking to supplement the feedstock with ethane.
Reliance had in 2014 announced its ethane plans and started importing the feedstock from the US in 2017. It is importing 1.6 million tonnes per annum of ethane and is using six VLECs for transporting it to India.
With ethane replacing propane and naphtha used in ethylene production, Reliance is estimated to have saved about $450 million annually.
Reliance used 2.5 million tonnes a year of naphtha as feedstock in petrochemical crackers and ethane reduced its use by 5,00,000 tonnes, which now could be exported.
Ethane is expected to be produced in large volumes in North America due to the shale gas revolution, which has generated an abundance of liquefied natural gas and liquefied petroleum gas (LPG).
Ethylene is the starting material for making a wide range of products — from packaging films, wire coatings, and squeeze bottles as well as plastics and synthetic rubber.
