The Union ministry of petroleum & natural gas has selected Gail (India) to implement the Rs.2,500 crore Assam gas cracker project, in preference over Reliance Assam Petrochemicals -- a joint venture between Reliance Industries and the Assam government.

The project to come up at Dhuliajan, over the next five years, would involve setting up of a methane separator from 5 mmscmd of gas to be made available from Oil India Ltd. The project also involves modification of the LPG plant of Gail to produce "C2+liquid" from 1.35 mmscmd of gas to be supplied by ONGC. Production facilities for 3 lakh tpa of ethylene and 2 lakh tpa of high density polyethylene (HDPE) also form part of the project.

The petrochemical project, envisaged as part of the Assam Accord, was to be set up by Assam Petrochemicals, a joint venture between Reliance Industries and the Assam government. The project, ran into trouble following unresolved issues over subsidies, gas pricing and availability of raw materials.