GAIL (India) Ltd. inked a pact worth Rs 63,000 crore with Bharat Petroleum Corp. for the supply of propane for its upcoming petrochemical plant in Maharashtra.
The agreement was signed for a 15-year supply of propane in Usar, in a significant move to secure the availability of feedstock for its petrochemical production, it said in its exchange filing on Wednesday.
The supply contract will see GAIL procure 600 kilo tonnes per year of propane from BPCL's LPG import facility in Maharashtra's Uran. It is presently capable of handling 1 million metric tonnes per year of LPG imports and is undergoing expansion to accommodate 3 MTPA of propane and butane imports, according to the statement.
The project in Usar is likely to commence operations in 2025 and will be India's first propane dehydrogenation plant.
The venture aligns with the surging demand for polypropylene, which is projected to reach 6.3 MT by 2025 from 4.9 MT in 2020, the company said.
Shares of GAIL closed 1.67% lower at Rs 117.5 apiece, while those of BPCL ended 2.22% higher at Rs 357 apiece as compared with a 0.47% decline in the benchmark NSE Nifty 50.
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