In the last few years, India has emerged as one of the large importers of acetic acid in the world. Indian import of acetic acid has nearly doubled during the last five years. In 2014-2015 import of acetic acid is likely to be in the region of 0.7 million metric tonne.
Import of acetic acid in India
(From April to March)
|Quantity in tonnes|
All ethyl alcohol based acetic acid plants were closed in the last few years due to non availability of ethyl alcohol, which is largely diverted for human drinking purpose. The price of ethyl alcohol has also gone up, making it uneconomical for ethyl alcohol based acetic acid plants.
At present, GNFC is the only unit producing acetic acid in the country by methanol route.GNFC is operating the plant at high capacity utilization level.
Obviously, the above situation calls for immediate step to build acetic acid project based on methanol route.
Indian Oil cancels plan for acetic acid project
Indian Oil Corp. and BP have abandoned plans for an acetic acid joint venture in India, citing high capital costs.
The proposed 50-50 jv would have built a one million metric tonne per year acetic acid plant at Vadodara, Gujarat State, based on BP’s Cativa XL technology.
The project also would have included gasification facilities, consuming petroleum coke supplied by IOC, to produce synthesis gas. Start-up had been originally scheduled for 2015 but was postponed until 2017.
Unwise and panicky move
Acetic acid project is highly relevant to India’s industrial and economic growth pattern. Strong case exists to build large capacity for acetic acid in India. Decision of Indian Oil Corporation to cancel the acetic acid project is surprising. Certainly the decision is not in India’s interest.
While India does not have enough methanol production , methanol can be imported to produce acetic acid, in view of the comfortable global supply scenario.
The project will have good economics under well thought out configuration. If the joint venture with BP would not be possible due to any reason such as the demand made by BP to be a joint venture partner, then the alternate options should have been examined.
In such circumstances, one tends to think that the decision of Indian Oil Corporation to cancel the acetic acid joint venture is unwise and a panicky move. It should reconsider it’s decision.