GAIL (India) Ltd, the state gas utility, and ONGC, the oil producer, are considering utilizing Shell's import terminal in Hazira, Gujarat, to import ethane and other hydrocarbons for their petrochemical projects. Last May, GAIL signed a memorandum of understanding with Shell Energy India Pvt Ltd to investigate various opportunities in the energy value chain, including ethane sourcing.

"GAIL, Oil and Natural Gas Corporation (ONGC) and Shell Energy India (SEI) Pvt Ltd signed a tripartite memorandum of understanding (MoU) to explore opportunities for import of ethane and other hydrocarbons and development of evacuation infrastructure at Shell Energy Terminal, Hazira", GAIL said in a statement.

Both GAIL and ONGC are investigating the importation of ethane from countries like the US to supply planned petrochemical plants intended to meet the growing demand for a variety of goods, including plastics, paints, and adhesives, in the rapidly expanding economy. GAIL aims to construct an ethane cracker to produce ethylene, a crucial component for manufacturing plastics.

GAIL stated that it had previously engaged in a bilateral Memorandum of Understanding (MoU) with SEI to explore various aspects of energy cooperation. As part of this collaboration, a respected consultant conducted a feasibility study on the development of ethane import infrastructure at the existing SEI terminal in Hazira.

ONGC has a bilateral MoU with GAIL for importing and handling of hydrocarbons. "In view of the emergence of ethane requirement in India and proposed development of ethane infrastructure, the three parties ONGC, GAIL and SEI have joined hands," the statement said.

Speaking on the occasion, Rajeev Kumar Singhal, Director (Business Development), GAIL said ethane has emerged as a preferred petrochemical precursor in India and the development of its import facilities has gained considerable traction. "Definite plans are being formulated to import ethane for domestic petrochemical plant requirements". Echoing the sentiment, ONGC group general manager and head of petrochemicals Ashok Kumar said going forward, ethane is the fuel of the future as feedstock to the Indian petrochemical industry. "India is adding good petchem capacities, and making available viable and affordable ethane is the key for the plans ahead".

The MoU signed on includes "cooperation with a clear focus for developing ethane import facilities after gap assessment in existing Shell Hazira Terminal facilities and usage of existing pipeline routes and facilities. The MoU signed envisages to foster efficiency and swift progress of the shared project by leveraging the combined strengths of all three parties." The move coincides with the objective towards assessment of existing operational infrastructure, ensuring its sufficiency, operational flexibility and effective management of upstream and downstream uncertainties. "The MoU is expected to offer new business prospects to all the parties along with offering diversification of petrochemical feedstock while aligning with the national priorities and Government of India's Atmanirbhar Bharat (Self Reliant India) mission with manufacturing in India", the statement added.