At a time when one only hears of a new project in the dotcom arena, or at least an IT venture, a greenfield project to manufacture high strength proppants is being put up near Pune.

Proppants are high resistant materials used to keep the cracks in the fractured oil and gas wells open, so that these precious products (oil and gas) can still be extracted from the bowels of the earth. Proppants are of three types, sand, resin coated sand and ceramic proppants, of which, sintered bauxite, a type of ceramic proppant, with high alumina, low silica and low clay content, is said to be the strongest available. High pressure proppants are particularly necessary in the high pressure needs of deeper wells.

The project, Hallmark-Hovis Minerals India, will be the first of such units in Asia, and fourth in the world. Two such units for the other three high pressure proppant facilities exist in the US, and one in Brazil.

The project is a joint venture of Hallmark Technical Services (not related to the Hallmark Inc group), a technical consultancy organisation with design, manufacture and operation expertise, and global metals and minerals company Hovis Gmbh, of Austria.

Hallmark-Hovis Minerals India will first put up a large sized pilot plant to make 1,500 tpa sintered bauxite proppants at a project cost of Rs 7.5 crores. On completion and stabilisation of the project, the company proposes to increase it to a 5,000 tpa unit. The 60:40 joint venture between Hallmark and Hovis will have Rs 2.5 crores equity, and Rs 5 crores in the form of term loans.

Hallmark will provide the technical expertise and the land and facilities, while Hovis will help in raw material procurement and marketing the product, world-wide.

The new project will cater to the high strength proppant (HSP) needs of the oil and gas industry. The company estimates the global need for HSP to be in the range of 100,000 tons, of which 20 per cent of the demand comes from Asia. The demand in Asia is expected to rise substantially in the coming years, and Hallmark Hovis being the only unit on this side of the globe, expects to cater to this demand.

Domestically, the single user of HSP is ONGC, whose demand for low strength proppants is 1,000 tpa, and that of HSP is 600 tpa, all of which it currently imports. Prices range between $800 per ton for LSP to $3,750 per ton for HSP.

Hallmark Hovis expects to have a decided price advantage over imported HSP. "The ready availability of the appropriate grade bauxite in western Maharashtra will make this possible," said Hallmark Hovis CEO A K Dasgupta at the launch of the project.

The plant has been conceived in two parts, the first for crushing and calcining bauxite will be at Sanaswadi, 35 km from Pune, while the grinding, pelletisation and sintering will be undertaken 15 km further, at Ranjangaon MIDC, 50 km from Pune.