BP, IOC and GAIL to invest in Middle-East DME plant

British Petroleum, along with the IOC and Gas Authority of India Ltd (GAIL) will invest $ 600 mm for setting up world's first commercial plant for producing di-methyl ether (DME) for use as alternate fuel in power plants. The 1.8 mm ton capacity DME plant would be located in one of the natural gas producing Middle-East countries and would be built at an estimated cost of $ 500 mm, British Petroleum associate president Raj Puri said.
Another $ 100 mm would be required for creating marketing infrastructure in India, he said, adding that DME supplies was an alternative to naphtha in power plants as feedstock would begin from early 2005.
"DME is a cleaner and cheaper alternate fuel that can replace naphtha in power plants as feedstock, diesel as transport fuel and LPG as domestic cooking gas," Puri said. The alternate fuel would be up to 40 % cheaper than naphtha besides being much energy efficient and environment-friendly, he said.

The British Petroleum will hold 50 % in the joint venture while IOC and GAIL would have 24 % equity each in the project which will give the consortium the process license of DME production worldwide. The Deharadun-based Indian Institute of Petroleum (IIP) would hold the remaining 2 % in the venture, Puri said. (PTI)