GAIL Shuts Pata Petrochemical Plant On Demand, Offtake Issues
Several petrochemical plants in India have been forced to shut operations amid a nationwide lockdown to combat the coronavirus.
GAIL (India) Ltd. has shut its petrochemical plant at Pata, Uttar Pradesh, joining a host of petchem makers who have been forced to shut units as the unprecedented nationwide lockdown evaporated demand and created transportation hurdles.
The state-owned gas utility first cut capacity of the 400,000-tonnes-a-year polyethylene plant at its Pata complex by half as two-thirds of trucks that used to transport finished products to users stopped operations soon after the lockdown was imposed, sources privy to the development said.
But with polymers it produces filling every inch of space in its godowns, GAIL last week shut the plant, they said, adding the company continued to operate the LPG production unit at Pata to meet the cooking fuel demand in the country.
Polymers/polypropene finds usage in a broad range of industries such as textiles, packaging, stationery, plastics, aircraft, construction, rope and toys.
The firm had previously shut the 210,000-tonnes-a-year high density/linear low density polyethylene swing plant since March 25.
Several petrochemical plants in India have been forced to shut down since a nationwide lockdown was imposed from March 24 until April 14 to fight the fast spreading coronavirus.
The lockdown shut factories that made plastics products and packing material using polymers produced at plants such as GAIL’s Pata unit. Also, the petchem units faced labour shortage as migrant labourers returned home.
The lockdown has also hit trucking operations, hampering transportation of finished goods.
Major producers, including Indian Oil Corporation Ltd., Bharat Petroleum Corporation Ltd., and Haldia Petrochemicals Ltd. have reduced production or shut units in an effort to balance inventory against the sharp drop in domestic demand.
While Indian Oil is on the verge of shutting down its 800,000-tonnes-a-year cracker at Panipat in Haryana due to low demand, Haldia Petrochemicals has closed its steam cracker and polymer units, sources said.
BPCL has reduced operating rates at its refinery-linked petrochemical units in Kochi and Mumbai to less than a third.
ONGC Petro Additions is reducing operating rates at its high-density polyethylene and linear low-density polyethylene production lines at Dahej in Gujarat.
Mangalore Refinery and Petrochemicals Ltd. shut its 440,000-tonnes polypropene plant at Mangalore. Indian Oil also shut its 700,000-tonnes polypropene plant at Paradip in Odisha.
It was not clear if Reliance Industries Ltd., which operates crackers and downstream units producing paraxylene, purified terephthalic acid, monoethylene glycol and polymers, has also reduced operating capacity.
Officials are hopeful that even if the lockdown is not lifted completely, some industries such as petrochemicals units will be allowed to resume operations as the material they make is used not just in packing of medicines and medical equipment but also find usage in personal protective equipment.
It remains to be seen how fast the plants can get back into production considering it may take some time for workers to return and for logistics and transportation to resume normal operations.