Global energy giant British Petroleum (BP) along with Indian Oil Corporation (IOC) and Gas Authority of India Ltd (GAIL) will invest US $ 600 million 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 million tonne capacity DME plant would be located in one of the natural gas producing Middle-East Asian countries and would be built at an estimated cost of US $ 500 million, British Petroleum associate president Raj Puri told PTI in New Delhi.

Another US $ 100 million would be required for creating marketing infrastructure in India, he said adding DME supplies as alternate 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 upto 40 per cent cheaper than Naphtha besides being much energy efficient and environment- friendly, he said. British Petroleum will hold 50 per cent in the joint venture while IOC and GAIL would have 24 per cent equity each in the project which will give the consortium the process license of DME production worldwide.
Deharadun-based Indian Institute of Petroleum (IIP) would hold the remaining two per cent in the venture, Puri said. Bureau Report