Brahmaputra Cracker to Get Feedstock Subsidy from the Central Government

Brahmaputra Cracker and Polymer Limited (BCPL), a subsidiary of GAIL (India) Limited and one of the leading producers of HDPE, LLDPE and PP in the country was earlier under the administrative control of the Department of Chemicals and Petrochemicals. The government, however, has given this control to the Ministry of Petroleum and Natural Gas following which the Assam Cracker project has been granted a feedstock subsidy. BCPL had earlier estimated that for the company’s Assam cracker project to be viable and have an IRR of 10 per cent, a subsidy in its feedstock cost worth INR 46 Billion would be necessary. Keeping this in mind, the Oil Ministry has accepted the proposal and granted the above stated amount as a subsidy over a period of 15 years. BCPL will submit the proposal on yearly basis from the next fiscal year which will be reviewed and examined in consultation with the Ministry of Finance. Setting up of the Assam gas cracker project involves setting up of Ethylene manufacturing unit with annual production capacity of 200 KT which would use gas as feedstock. This being the first petrochemical project in the entire North-East region, is anticipated to contribute to the development of Assam and adjoining North-East states. The Ministry has assured of the committed quantity and quality feedstock to the project as approved in the cabinet meeting in 2006.