GAIL and Shell reach an agreement to discuss ethane supply

20 Mar 2023 CW Team

The largest gas utility in India, GAIL, announced that it has reached a deal with Shell Energy India to investigate potential for ethane sourcing and other aspects of the energy value chain. To replace natural gas and naphtha as the feedstock at petrochemical plants, GAIL intends to import ethane from the US.

GAIL said in a statement that it and Shell Energy India had inked an agreement to "examine prospects for infrastructure development for ethane sourcing."

GAIL published a tender last month to contract a VLEC (very large ethane carrier) for 20 years beginning in the middle of 2026 to import ethane from the US.

The ship, which can carry between 80,000 and 99,000 cubic metres of ethane, is intended to transport it from the US ports of Marcus Hook, Nederland, Morgan's Point, or Beaumont to Dahej, Hazira, or Dabhol in Gujarat or Maharashtra.

GAIL operates a petrochemical factory at Pata, near Kanpur in Uttar Pradesh, and is also looking to set up another one at Usar in Maharashtra.

Because the government shifted gas supplies from the plant to municipal gas suppliers, the firm had to reduce operation rate at Pata. This had an effect on its profitability, thus the company is now exploring to add ethane as a feedstock supplement.

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