GAIL, Apollo Tyres sign accord for Steam Conversion Project through Waste Heat Recovery

Gail India Ltd has announced that the Company and Apollo Tyres on July 10, 2007 signed an Agreement for a Steam conversion project based on Waste Heat Recovery system from the Company's gas turbines. This rare, multi-benefit project would not only utilize Clean Development Mechanism (CDM) for power generation but would also lead to conservation of gas as well as increased energy efficiency.

Shri. B C Tripathi, Director (Marketing), of the Company and Shri. Mahesh Sharma, Chief - Legal, Apollo Tyres signed the agreement for the Steam Conversion Project at the Company's Office in New Delhi in the presence of Dr. U D Choubey, CMD, of the Company, Shri. Onkar S Kanwar, CMD, Apollo Tyres Ltd and Dr. Amit Mitra, Secretary General, FICCI and senior officials of both Companies.

A first-of-its-kind project, this will be implemented by the Company at its Vaghodia Compressor Station (near Vadodara) for supply of steam to Apollo Tyres within 24 months at a cost of around Rs 35 crores. The duration of the Agreement is 15 years and the commercial supply will start from July 2009. The Annual Contracted Quantity is 4,36,800 MT.

Speaking on the occasion, Dr. U D Choubey, CMD of the Company said that the project is going to be new chapter and a good beginning for not only GAIL but also in India where a public - private participation has been initiated for combating hazardous effects of greenhouse gases. He also emphasized the need to proactively address the issue of greenhouse gas emissions by corporates in the country.

The project, based on Waste Heat Recovery System from the Company's Gas Turbines exhaust, is conceived as a Clear Development Mechanism (CDM) project under Koyto Protocol. The project would enable Apollo Tyres generate 4 MW of Power and enable the two Companies save around 935 Million Kilo Calories of energy in producing process stream, thereby also avoiding formation of 55000 tonnes of CO2 per annum.

The Company has already identified 10 projects, including Waste Heat Recovery projects as CDM projects. Once approved, the Company will be entitled to avail CDM benefit, which in this case, is expected to be to the tune of 50,000 - 55,000 Certified Emission Reduction (CERs) as Carbon Credit.

Apollo Tyres plant, which is situated in close proximity of the Company's compressor station, will supply the required water and will be able to derive the benefit of Steam supply from the Company for their tyre manufacturing and auxiliary power generation. Presently, Apollo Tyres plant is consuming approximately 74,000 SCMD of RLNG as fuel for their plant requirements. One the project is implemented, the consumption of RLNG will reduce to 40 per cent which in turn, would provide cost saving as well.

The Company is pursuing implementation of waste heat recovery projects of around Rs 200 crore for power generation at two other compressor stations and has also initiated feasibility study for three locations along Hazira - Vijaipur - Jagdishpur (HVJ) Pipeline, Process Plants.

Source : Equity Bulls

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