NEW DELHI: Prime Minister, Manmohan Singh, will lay the foundation for the Rs. 5,460 crore Assam gas cracker project at Lepetkata in Dibrugarh district, Assam, on April 9.

Joint venture

State-run Gas Authority of India Limited (GAIL) holds 70 per cent stake in the Brahmaputra Cracker and Polymers, the joint venture company implementing the project. Oil India and Numaligarh Refinery share the remaining 30 per cent equity equally.

The Union Petroleum and Natural Gas Minister, Murli Deora, along with the Assam Chief Minister, Tarun Gagoi, will also be present on the occasion.

The launch of the project has been hanging fire for a long time and it was only recently that Mr. Gagoi, during his meeting with Dr. Singh, managed to get the green signal for the project. The project is to be completed in 60 months from the date of financial closure.

Sources in GAIL said the petrochemical complex would comprise a gas separation plant, cracker unit, downstream polymer and integrated off-site and utilities plants. The complex has been configured with a capacity of 2.20 lakh tonnes annually of ethylene and 60,000 tonnes annually of propylene with natural gas and naphtha as feedstock.

Tax exemption

On its part, the Assam Government has granted exemption from entry tax on capital goods, exemption from works contract tax during construction and value added tax (VAT) exemption on feedstock and products for 15 years from the date of commencement of production.

The existing LPG plant from GAIL's Lakwa plant will be modified to process gas for recovery of ethane and higher hydrocarbon fraction, which will be transported to Lepetkata through a pipeline. Originally, the project was to be implemented by Reliance Assam Petrochemicals Ltd, a joint venture company of Assam Industrial Development Corp. and Reliance Industries. RAPL was granted various concessions by the Union Government for implementing the project but it never took off. In 2003, GAIL was asked to examine the feasibility of taking up the Assam gas cracker project on its own and in 2006 Union Cabinet gave the go ahead to GAIL to implement the project.

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