SAIL's Rourkela Steel Plant has signed a 15-year gas supply agreement with BOC India Limited, a part of Euro12.3-billion Linde group.

As per the agreement, BOC will invest nearly Rs500 crore to set up air separation plants (oxygen plant) and ancilliary equipment under the build-own-operate to meet the requirements of Rourkela Steel and also growing demand for liquid products in eastern India.

RSP under its planned expansion programme, plans to increase its steel production capacity to 3.2 mtpa by adding a new blast furnace and converter which requires setting up air separation units (ASU) to meet the incremental requirement of oxygen, nitrogen and argon.

BOCI envisages supply of 2,600 tonnes per day (TPD) of gases to RSP and the balance 400 tpd of liquid products including oxygen, nitrogen and argon will be sold to markets in Orissa, and neighboring states of Chhattisgarh, Madhya Pradesh, Andhra Pradesh and West Bengal.

BOCI's two oxygen plants with a planned capacity of 700 TPD each, will supply daily 1400 tonnes oxygen, 600 tonnes nitrogen and 17 tones of argon to cater to RSP's planned expansion project.

"The supply of gases is critical to the operation of the iron and steel making furnaces, and the award of the oxygen plant contract is an important milestone for our expansion project. We look forward to a lasting relationship with BOC," said N Singh, managing director, RSP S K Menon, managing director, BOC India Ltd said,"We were able to offer the most attractive product and service offer to RSP by fully realising synergies between RSP's demand and our growing merchant liquid business. This contract is a milestone by virtue of being the largest and most competitive BOO gas supply contract awarded by SAIL so far."

Sanjiv Lamba, regional business unit head for Linde's South & East Asia business said, "This win at SAIL, Rourkela, is an integral part of our strategy to invest in India with premier customers. This contract takes us a step forward in further strengthening our long term relationship with SAIL which has been built over decades on the basis of mutual trust and partnership."

In 2007, BOCI had won a contract for supply and installation of a 700 tpd ASU at RSP on outright sale basis which is currently under construction. In addition, BOC is also constructing two 750tpd ASUs for SAIL's IISCO steel plant, and had previously supplied and commissioned a 550tpd ASU for Bhilai steel plant of SAIL in 1998.

The new plant will be designed by Linde's engineering division with major items of plant and equipment being imported from Germany and while local project execution will be overseen by the project engineering division of BOC.

BOC India is involved in gas and gas –related business as well as manufacture of cryogenic and non-cryogenic vessels and designing and commissioning of projects.

The Linde Group is a world leading gases and engineering company with more than 50,000 employees working in around 100 countries worldwide. In the 2007 financial year it achieved sales of EUR 12.3 billion.

RSP is one of the five integrated steel plants operated by Steel Authority of India Limited (SAIL). RSP was the first integrated steel plant in the public sector in India, set up with German collaboration with installed capacity of 1 million tones per annum (mtpa) of crude steel, which was subsequently enhanced to 1.9mtpa.

The present capacity of the plant is 1.9 million tons of crude steel and 1.671 million tonnes of saleable steel with a product range of various flat, tubular and coated products.

RSP gets 100 per cent iron ore requirement around 25.7 million tonnes of iron ore last year from the captive mines of SAIL.