GAIL Plans to Build $4.9bn Ethane Cracker in West India

GAIL (India) Ltd, the country's top gas supplier, plans to build a 400-billion rupee ($4.89 billion) ethane cracker near its liquefied natural gas (LNG) import plant in Western India, two sources with direct knowledge of the matter said, as it seeks to meet an expected surge in demand.

Indian companies are boosting their petrochemical production capacity as the expanding economy boosts the need for goods ranging from plastics to paints and adhesives. A cracker produces ethylene, required for products such as plastics.

Demand for petrochemicals could nearly triple by 2040, according to estimates by top refiner Indian Oil, forcing companies to make big investments to set up new facilities across the country.

GAIL is looking for land in the coastal region of Dabhol in Maharashtra state for the 1.5 million tonnes a year (mtpa) cracker project. GAIL operates a 5 mtpa LNG plant at Dabhol.

The company plans to import ethane from the United States for the project, the source said.