The Hindu Business Line : Praxair bags order to build DSP oxygen plant

Winning bid
Praxair likely to sign an agreement with SAIL in two weeks.
To sell a portion of the gas to other units apart from DSP.
The steel major will provide the land for the plant.

Kolkata , May 11

Global industrial gases major Praxair Inc, a Fortune 500 company, has won the race to set up a 700-tonnes-a-day capacity oxygen plant at the Durgapur Steel Plant (DSP).

Praxair India Pvt Ltd, the Indian subsidiary, is likely to sign an agreement with SAIL in two weeks.

SAIL would not have any financial involvement in this project; the plant would be set up and run by Praxair on a build-own-operate basis.

"They would also be allowed to sell a portion of the gas to other units apart from DSP but after meeting our total requirements. The agreement with Praxair would be signed soon," sources in DSP told Business Line.

The steel major will provide the land for the plant. It is learnt that Praxair was selected from among three bidders, of whom one was Goyal Gases.

DSP's oxygen requirement is expected to rise sharply in the next few years as the plant is gearing up to increase its hot metal production as a part of SAIL Corporate Plan 2011-12.

SAIL would be investing Rs 2,800 crore in DSP over 5-7 years, and would increase its overall capacity from 1.86 million tonnes per annum to 3.2 million tonnes per annum.

The ongoing investment programme is expected to help DSP route its entire crude steel production through the continuous casting process. It would also reduce the steel plant's production cost and improve the product mix.

Currently, DSP's product mix has over 54 per cent semi-finished steel. Work has begun on a new bloom caster of 0.85 million tonnes per annum capacity.

Estimated to cost Rs 270 crore, it is likely to start production next year. It would help DSP produce its total steel through the continuous casting route.

DSP recently installed a ladle furnace of 0.77 million tonnes per annum capacity at a cost of Rs 21.85 crore.

There are plans to set up a bar and rod mill and a medium structural mill to enhance its finished component in the product mix.

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