Assam Gas Cracker project commissioned

Assam Gas Cracker project commissioned

Thirty years after signing of the Assam Accord, the promised mega gas cracker project at Lepetkata, Dibrugarh has been commissioned. While the Stage I has been commissioned, the Stage II will start production in two weeks’ time.

Set up at an estimated cost of Rs 9,285 crore, the Assam Gas Cracker project, the northeastern region’s first petrochemical venture, will go on stream next month.

“The cracker, polypropylene (PP) unit, gas processing unit and all utilities have been commissioned,” GAIL India chairman and managing director BC Tripathi told newsmen here. The GAIL is the majority stake-holder in the Brahmaputra Crackers and Polymers Ltd (BCPL) that has been implementing the gas cracker project.

“The plant has started producing ethylene, which will form feedstock for manufacturing polymers that are basic building blocks of plastics,” he said. The LLDPE and HDPE unit will be made operational after receipt of ethylene from the cracker plant. “The entire plant will be commission in next two weeks’ time,” Tripathi said.

Union Minister for Petroleum and Natural Gas, Dharmendra Pradhan tweeted, “Congratulations to Government of Assam, GAIL, OIL and NRL for Stage I commissioning of Assam Gas Cracker project of BCPL. It will produce 2,80,000 MT of feedstock for downstream industries.”

Talking to this newspaper, Union Minister for Youth Affairs and Sports, SarbanandaSonowal thanked Prime Minister Narendra Modi and Dharmendra Pradhan, stating, it was because of their initiative that the long-delayed project has seen the light of the day.

“My congratulation to the people of Assam for their struggle to set up the project, which was promised in the Assam Accord. It is the outcome of their long struggle that the Stage I has been commissioned today,” he said.

The project will usher in an era of economic uplift for the people living in both the Brahmaputra and Barak valleys, and go a long way in resolving the unemployment problem of the State,” Sonowal said.

What was surprising though is the low key commissioning of the mega project. The then Prime Minister Manmohan Singh on April 9, 2007 had laid the foundation stone of the project at Lepetkata, 15 km from Dibrugarh. At that time it was said that the project would take 60 months to complete.

The Centre has sanctioned a capital subsidy of Rs 2,136 crore and a feedstock subsidy of Rs 908.91 crore for a 15-year period for the project with an exemption of excise and income tax for 10 years. The GAIL and BCPL have already signed a deal for marketing petrochemical products sold at the plant.

The GAIL holds 70 per cent interest in the BCPL, while the remaining 10 per cent is equally split between Oil India Ltd, Numaligarh Refineries Ltd and the Government of Assam. The joint venture company, BCPL was incorporated on January 8, 2007.

The project came as a part of the historic Assam Accord signed on August 15, 1985 aimed at boosting socioeconomic development of the region. It was approved by the Cabinet Committee on Economic Affairs (CCEA) on April 18, 2006.

But the target deadlines were delayed – first to December 2013, then to January 2014 and to June 2015. The project is finally being commissioned now. The delay resulted in the project cost going up. From an initial Rs 5,460 crore it was revised to Rs 9,285 crore. Apart from changes in design, escalating costs of steel, cement and other construction materials were cited as the main factors responsible for the hike.

The petrochemical project will produce a range of polymers that will find application in sectors such as packaging, film, injection, raffia and blow moulding. The feedstock for the project will be natural gas and naphtha. The OIL and ONGC will supply natural gas, while naphtha will be supplied by the NRL.

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