IIICorp Opportunity of the Week: Andhra Pradesh in talks with Chinese firms for partnership in its proposed USD 16bn hydrocarbon complex

The State Government of Andhra Pradesh(AP) is in talks with Chinese partners for a potential partnership to develop its proposed USD 16bn cracker complex in the port town of Machilipatnam.

“We had a Chinese delegation representing a potential consortium partner inspecting the land proposed for the Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR),” said CHSS Prasad, Chief General Manager (Projects), Andhra Pradesh Industrial Infrastructure Corporation (APIIC). APIIC is the nodal agency implementing the project along with Vishakhaptnam Development Authority and the industries department of the AP state government. He however declined to share further details of the potential partner, citing confidentiality.

The plan is to put together a consortium of state-owned oil companies, exploration firm Oil and Natural Gas Corporation Limited (ONGC) along with private global players who have expertise in developing a facility of this magnitude. This news service had earlier reported that Dubai-based Al Kharash Contracting Co was one of those global players that had showed initial interest.

In a cracker complex of this scale, the refinery, or the mother cracker, creates raw material or feedstock for several chemical-making units, where the end-user industries involve polymers and pharmaceuticals, among others. Once completed, this will be India’s largest cracker unit with a capacity of 10 million metric tons per annum (MMTPA).

An industry source said a mother cracker complex of this size will open up opportunities to equipment suppliers from developed markets in the US and Europe. According to a previous working paper published by the Indian Council for Research on International Economic Relations (ICRIER), India currently has three naphtha-based, three gas-based, and one mixed-feed cracker units with a combined ethylene capacity of 3.3MMTPA.

The major feedstock used in petrochemical units is naphtha and natural gas (propane and butane), while the major intermediate products produced in the country are ethylene, propylene, butadiene, benzene, toluene and xylene, which are used in a variety of industries.

 

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