• Gail inks ethane supply deal with Shell Energy

    Indian state-controlled gas distributor Gail has signed an initial agreement with Shell Energy India to import ethane, as part of feedstock diversification for its petrochemical plant.
    It is unclear how much ethane Gail is seeking to import from Shell Energy India. But Gail had expressed interest in importing US ethane

    in February, for 20 years starting from mid-2026 on very-large ethane carriers with a capacity of 80,000-99,000m³, for its petrochemical plant in Pata, Uttar Pradesh.

    The 810,000 t/yr polymer-producing plant reached its full capacity utilisation in February using LNG from alternative sources, the company said in an exchange filing. Gail was referring to sources other than Russia after imports from state-controlled Gazprom fell sharply following the Russian invasion of Ukraine.

    Gail faced a gas shortage last year following a disruption in supplies from Gazprom, which led to it having to reduce output at the Pata plant by 40pc and even shut it down during October, with only a partial facility operating later in the year, Gail’s director of finance Rakesh Jain told investors in January. The firm is looking for alternative fuel supplies for the Pata plant on a long-term basis, he added.

    The ethane imported via Shell Energy with be transported to demand centres through Gail’s 14,830km of natural gas pipelines.

    Despite the recent decline in natural gas prices, Indian petrochemical producers are not completely relying on gas, but eyeing different feedstock such as ethane and naphtha as part of feedstock diversification, according to market participants.

    Private-sector Reliance Industries also has been optimising naphtha and ethane as feedstocks for its polymer production. Ethane is produced in large volumes in North America because of the US shale gas revolution, which generated an abundance of LNG and LPG.

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