Assam Gas Cracker Project moved to oil ministry
BCPL, a central public sector undertaking, is implementing the Assam Gas Cracker Project (AGCP), which is seen as part of the implementation of the Assam peace accord, and would give impetus to the development of the northeastern region.
The CCEA, headed by Prime Minister Narendra Modi, approved the change of the administrative control, an official statement said here.
It also approved feedstock subsidy to BCPL for 15 years of plant operation to maintain minimum internal rate of return on equity investment (IRR) of 10 per cent (after tax).
"To bring the IRR to 10 per cent, BCPL has estimated feedstock subsidy of approximately Rs 4,600 crore for the project for 15 years of plant operation. BCPL will submit the proposal on yearly basis from the next financial year onwards and the administrative ministry/ department will devise a mechanism to examine the proposal in consultation with the Ministry of Finance," it said.
The Ministry of Petroleum and Natural Gas will make firm arrangements through concerned public sector undertakings (PSUs) for supply of committed quantity and quality of feedstock to the project as envisaged in the earlier CCEA approval of 2006, it added.
The Assam Gas Cracker Project involves setting up of facilities for the manufacture of two lakh tonnes of ethylene annually using gas as feedstock.
The first phase of long-delayed Rs 9,285-crore project, the first petrochemical project in the northeastern region, was commissioned in late 2015.
Then prime minister Manmohan Singh on April 9, 2007, had laid the foundation stone of the project at Lepetkata, 15 km from Dibrugarh. It was said at that time that the project will take 60 months to complete - by April 2012.
But, the target declines were delayed -- first to December 2013, than to January 2014 and to June 2015. The project is finally being commissioned in November 2015.
The delay resulted in the project cost going up. From an initial Rs 5,460 crore, it was revised to Rs 9,285 crore. Apart from changes in design, escalating costs of steel, cement and other construction materials were cited as the main factors responsible for the hike.
State-owned gas utility GAIL holds 70 per cent interest in BCPL, while the remaining 10 per cent is equally split between Oil India Ltd, Numaligarh Refineries Ltd and the Assam government.
The project came as part of the historic Assam Accord signed on August 15, 1985, with a view to bring socioeconomic development of the region. It was approved by the CCEA on April 18, 2006.
Subsequently, a joint venture, BCPL was incorporated on January 8, 2007.The feedstock for the project is natural gas and naphtha. OIL and ONGC supply natural gas and naphtha is supplied by NRL. ANZ HRS
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