BPCL, GAIL sign Rs 63,000cr propane supply deal for India’s petrochemical growth

In a significant move reshaping India’s petrochemical industry, Bharat Petroleum Corporation Limited (BPCL) and GAIL (India) Limited have entered into a monumental 15-year supply agreement. Signed on November 1, 2023, in New Delhi, this Rs 63,000 Crore deal focuses on supplying Propane, a vital petrochemical feedstock, for GAIL’s new PDH-PP project in Usar, Maharashtra.

Key Details of the Propane Supply Agreement

This landmark agreement was officiated by D. V. Mamadapur, Executive Director (LPG) of BPCL, and Kamlesh Sharma, ED Marketing Retail, GAIL. Present were Sukhmal Jain, Director (Marketing) of BPCL, and Sanjay Kumar, Director (Marketing), GAIL. The deal ensures the supply of 600 KTPA of Propane from BPCL’s LPG import facility at Uran, which is currently undergoing expansion to handle up to 3 MMTPA of propane and butane imports.

Impact on the Indian Petrochemical Sector

The GAIL’s Usar PDH-PP project, strategically located in Maharashtra, marks the start of India’s first propane dehydrogenation (PDH) plant, set to commence operations in 2025. With a nameplate capacity of 500 KTPA, this PDH unit is integrated into a polypropylene (PP) plant of the same capacity. This collaboration between two of India’s Maharatna companies signifies a massive leap in meeting the rising domestic demand for polypropylene, anticipated to grow from 4.9 million tons in 2020 to 6.3 million tons by 2025. The agreement symbolizes not just a significant stride for BPCL and GAIL but also a vital step forward for India’s booming petrochemical industry.