GAIL Announces Rs 60,000 Crore Capex For India’s Largest Ethane Cracker Unit In Madhya Pradesh

State-owned gas giant GAIL (India) on Monday said it intends to set up a 1,500-kilo tonnes per annum (KTPA) ethane cracker project at Ashta tehsil of Sehore district in Madhya Pradesh.

The project involving an investment of Rs 60,000 crore will be the country's largest ethane cracker project.

Ethane crackers are plants that perform the first step in the process of transforming ethane — a component of natural gas — into plastics products.

First, the plants separate ethane from natural gas to produce ethylene, the building block of plastics and other industrial products. The plants use extreme heat to “crack” the molecular bonds in ethane to produce ethylene. Ethylene is further processed into a resin, which is used to produce plastics products.

Cracking ethane can yield more than 80 per cent ethylene. The growth of ethane as an ethylene feedstock is due to its low relative cost, high ethylene yield, and minimal co-products.

In a regulatory filing, the company said it has submitted its request to the Madhya Pradesh government for providing suitable enablers for the project.

"Around 800 hectares of land shall be provided by the MP Industrial Development Corporation Limited, for which state government has already initiated the process. Investment approval from GAIL's Board shall be sought after favourable outcome on enablers," the Maharatna company said in the BSE filing.

Earlier this month, the MP government approved the project, which is expected to generate 15,000 jobs during the construction period and about 5,600 during the operation period. A 70-hectare township is also proposed in the project. The groundbreaking ceremony is expected by February 2025, with commercial production likely starting in FY31.