Sail, BOC India sign 15 year gas supply contract

08 January 2009

SAIL's Rourkela Steel Plant has signed a 15-year gas supply agreement with BOC India Limited, a part of Euro12.3-billion Linde group.

As per the agreement, BOC will invest nearly Rs500 crore to set up air separation plants (oxygen plant) and ancilliary equipment under the build-own-operate to meet the requirements of Rourkela Steel and also growing demand for liquid products in eastern India.

RSP under its planned expansion programme, plans to increase its steel production capacity to 3.2 mtpa by adding a new blast furnace and converter which requires setting up air separation units (ASU) to meet the incremental requirement of oxygen, nitrogen and argon.

BOCI envisages supply of 2,600 tonnes per day (TPD) of gases to RSP and the balance 400 tpd of liquid products including oxygen, nitrogen and argon will be sold to markets in Orissa, and neighboring states of Chhattisgarh, Madhya Pradesh, Andhra Pradesh and West Bengal.

BOCI's two oxygen plants with a planned capacity of 700 TPD each, will supply daily 1400 tonnes oxygen, 600 tonnes nitrogen and 17 tones of argon to cater to RSP's planned expansion project.

"The supply of gases is critical to the operation of the iron and steel making furnaces, and the award of the oxygen plant contract is an important milestone for our expansion project. We look forward to a lasting relationship with BOC," said N Singh, managing director, RSP S K Menon, managing director, BOC India Ltd said,"We were able to offer the most attractive product and service offer to RSP by fully realising synergies between RSP's demand and our growing merchant liquid business. This contract is a milestone by virtue of being the largest and most competitive BOO gas supply contract awarded by SAIL so far."