India's ONGC plant explosion: impact on domestic polyolefins

In the early morning of September 24, local time, the Indian Oil and Natural Gas Corporation (ONGC) gas pipeline at the Hazira port plant in Gujarat state had an explosion. It is reported that the plant obtained natural gas from its west coast oil fields to produce products such as liquefied petroleum gas and naphtha.

Gujarat State of India is the center of India's petrochemical industry and has the largest refining and chemical base in India. The Hazira Port, where the accident occurred, involved some chemical companies including OPAL (ONGC Petro Additions) and RIL (Reliance Industries Group). The market reported that the polyolefin plants that may be involved include: 320,000 tons/year LLDPE plants, 14 HDPE equipment with a capacity of 10,000 tons/year and PP equipment with a total capacity of 400,000 tons/year. So how much impact does it have on the domestic market?

First of all, Indian oil refining companies are mainly divided into two major categories, state-owned and private. For example, ONGC (Oil and Gas Company of India) and IOC (Oil India Limited) belong to state-owned oil refining companies, while Essar (Essar Petroleum) and RIL (India Trust Industrial companies), etc. belong to private oil refining companies. State-owned refineries are mainly responsible for meeting domestic demand and assume more social functions, while private oil refineries are mainly responsible for the export of petroleum products. Therefore, because Indian state-owned enterprises have less import and export business, the main sources of Indian products circulating in the domestic polyolefin market are very limited. They are basically HPL (Haldia Petrochemical Company), RIL (India Trust Industrial Company) and a small number of ONGC. Products of subsidiary OPaL (ONGC Petro Additions). OPaL owns one of India’s largest petrochemical complexes in Gujarat State, involving polyolefin production capacity including two sets of 360,000 tons/year full density devices, one set of 340,000 tons/year HDPE devices and one set of 340,000 tons/year PP Device. The petrochemical complex is located in Dahej, OPAL company sources also said it was not affected by the explosion.

Secondly, even if the polyolefin plants of other companies’ parks are affected and subsequent delays in the supply of Indian exports to China, it has been the norm in recent months. After all, since the conflict between China and India in June, the supply of goods from India to China has been There are delays. Moreover, according to Jinlianchuang's 2019 import data statistics, LLDPE imported from India only accounted for 5.58% of the total LLDPE imports, while HDPE accounted for 5.53%. Because of the low import dependence of PP, the amount of imports from India is also minimal.

Furthermore, as of now, the fire at the Hazira Port Plant has been completely extinguished. ONGC sources also stated that there were no casualties and the affected products were limited to natural gas and ethylene, which had no direct impact on downstream installations. Jin Lianchuang believes that the explosion will have little impact on subsequent India's export resources to China, but due to the still tense situation between China and India and the domestic Yellow Sea military exercises, follow-up Indian resources are still delayed.