PROPANE SUPPLY AGREEMENT
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Context: GAIL (India) Ltd. has entered into a 15-year agreement with Bharat Petroleum Corp. Ltd. (BPCL) to supply propane for GAIL's upcoming petrochemical facility in Usar, Maharashtra.
- GAIL (India) Ltd. has signed a significant 15-year agreement with Bharat Petroleum Corp. Ltd. (BPCL).
- The agreement is valued at over ₹63,000 crore.
- Under this deal, GAIL will source 600 KTPA (thousand metric tonnes per annum) of propane from BPCL's LPG import unit located in Uran, Maharashtra.
BPCL LPG Import Unit Expansion
- BPCL's LPG import unit in Uran is currently equipped with a 1 MMTPA capacity.
- However, it is undergoing expansion to handle 3 MMTPA of propane and butane imports, likely to support the increased demand for propane supply to GAIL.
GAIL's Propane Dehydrogenation Unit
- GAIL is constructing a propane dehydrogenation unit in Usar, Maharashtra. This facility is notable as it is the first of its kind in India.
- The unit is expected to commence operations in 2025.
- It will have a nameplate capacity of 500 KTPA and will be seamlessly integrated into a polypropylene plant with an equal capacity for propylene production.
- The project aligns with the growing demand for polypropylene in the market. It is anticipated that the demand for polypropylene will reach 6.3 million tonnes by 2025, according to a statement by GAIL.
GAIL's Diversification Strategy
- This venture is part of GAIL's diversification strategy as outlined in its annual report for FY23.
- The company emphasizes that new business initiatives are central to its strategic outlook for enhancing profitability and expanding its market reach.
●Propane is a colourless and odourless hydrocarbon gas that is widely used as fuel for various applications. It is a versatile energy source known for its clean-burning properties and efficiency.
●It is commonly used in residential settings for heating homes and as a fuel for stoves, ovens, and other cooking appliances.
●It is utilized in agricultural machinery, such as tractors and irrigation pumps.
●It is commonly used for camping stoves, lanterns, and barbecue grills due to its convenience and portability.
●Propane is favoured for its environmental benefits, as it produces fewer emissions and pollutants when burned compared to other fossil fuels like coal and oil. It's considered a "clean" energy source.
●Propane is stored and transported in liquid form under pressure, which allows for efficient storage and transportation. When needed, it can be vaporized and burned to produce heat or power.
●The primary sources of propane production include natural gas processing and crude oil refining. Additionally, it can be produced from renewable sources, such as biomass and landfill gas, making it a more sustainable option.
Q. How has India's renewable energy sector evolved in recent years, and what policies and initiatives are in place to promote its further growth and sustainability?