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Gas supply pact for Assam cracker today

Our Bureau

GUWAHATI, Oct. 18

THE Gas Supply Agreement for the Rs 3,600-crore Assam gas cracker project is scheduled to be signed on Thursday at the Administrative Staff College Conference Hall between Reliance Assam Petrochemicals Ltd (RAPL) and Oil India Ltd (OIL).

Mr Ram Naik, Minister of Petroleum and Natural Gas, will be present on the occasion. This puts to rest all speculations about the uncertain future of the Assam project which has been hanging fire for the last six years.

In fact, the State Government applied for setting up the project as early as in 1984. After six years, the letter of intent was issued in 1990. The search for a major co-promoter took four years till the Reliance Industries Ltd was roped in on 1994.

But the worst part was that the project work could not be started for a number of reasons, including the non-existence of a gas supply agreement with the supplying agencies (OIL and ONGC) for the last six years. The other causes were belated objection to the original project site by the Indian Air Force and delay in finalisation of evaluation of the gas separation unit of GAIL at Lakuwa. There was also the low confidence level between the two parties regarding the gas linkage.

Now with the signing of the agreement, it is believed that the last hindrance to the project is over and RAPL will be able to start work at the earliest and complete the 200,000 TPA gas cracker project in 44 months as per the memorandum of understanding (MoU) of 1994.

Related links:
Assam gas cracker clears a hurdle -- Formal signing of gas pact between RIL, OIL soon

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