Gail, the Indian state-owned petrol distributor, has signed an initial agreement with Shell Energy India to import ethane as part of a feedstock diversification strategy for its petrochemical unit.
It’s yet to be determined how much ethane Gail wants to buy from Shell Energy India. However, Gail expressed an interest in importing US ethane for 20 years beginning in mid-2026 on very-large ethane carriers with a capacity of 80,000-99,000m3 for its petrochemical plant in Pata, Uttar Pradesh, in February.
According to an exchange filing, the 810,000 t/yr polymer-producing plant attained full capacity in February using LNG from alternate sources. Gail was referring to sources other than Russia, as imports from state-controlled Gazprom decreased drastically following Moscow’s invasion of Ukraine.
Gail suffered a petrol shortfall last year due to an interruption in supply from Gazprom, forcing it to curtail output at the Pata plant by 40% and even shut it down in October, with only a portion facility working later in the year, according to Rakesh Jain, Gail’s director of finance, in January. He noted that the company is searching for long-term alternate fuel suppliers for the Pata facility.
The ethane imported by Shell Energy will be delivered to demand centres via Gail’s 14,830 kilometres of natural gas pipes.
Notwithstanding the recent drop in natural gas prices, Indian petrochemical manufacturers are not only reliant on gas but are also considering ethane and naphtha as feedstock diversification, according to market participants, as per Argus.
Reliance Industries, a private sector company, has also been optimising naphtha and ethane as feedstocks for its polymer production.
Because of the US shale gas revolution, which produced an abundance of LNG and LPG, ethane is produced in great quantities in North America.
