Change at Jamnagar gas processing to attract a different pool of investors and strategic partners
Citing India as a high growth market with a deficit of the high value chemicals in the foreseeable future, Reliance Industries Ltd said it is repurposing the Gasification assets to help use syngas as a reliable source of feedstock to produce chemicals for a growing domestic demand.
This will result in an attractive business opportunity, added RIL in a statement on 24 Nov 2021.
Further, as the hydrogen economy expands, RIL will be well positioned to be the first mover to establish a hydrogen ecosystem.
With optionality in applications for Syngas, the nature of risk and returns associated with the gasifier assets will likely be distinct from those of the other businesses of the company.
This distinct business profile also provides the opportunity to potentially attract a different pool of investors and strategic partners for the gasification assets and new materials and chemicals projects.
Elaborating, RIL said the Gasification project at Jamnagar was set up with the objective to produce syngas to meet the energy requirements as refinery off-gases, which earlier served as fuel, were repurposed into feedstock for the Refinery Off Gas Cracker (ROGC). This enables production of olefins at competitive capital and operating costs. Syngas as a fuel ensures reliability of supply and helps reduce volatility in the energy costs.
Syngas is also used to produce Hydrogen for consumption in the Jamnagar refinery.
RIL targets to have a portfolio which is fully re-cyclable, sustainable and net carbon zero. This will be achieved by transitioning to high value materials and chemicals with renewables as the source of meeting its energy requirements.
As RIL progressively transitions to renewables as its primary source of energy, more syngas will become available for upgradation to high value chemicals including C1 chemicals and Hydrogen.
Further, carbon- di-oxide released during the process of producing Hydrogen is highly concentrated and easy to capture, substantially reducing the cost of carbon capture.
Overall, these steps will help sharply reduce carbon footprint of Jamnagar complex, said RIL, adding that its board has approved the implementation of a Scheme of Arrangement to transfer Gasification Undertaking into a Wholly-Owned Subsidiary (WOS).
The Scheme will also enable RIL to evaluate unlocking the value of syngas, with a collaborative and asset-light approach involving (a) Induction of investor(s) in the gasifier subsidiary and (b) Capturing value of upgradation in RIL through partnerships in different chemical streams.
The appointed date of the Scheme would be 31 March 2022 or such other date as may be determined by the Board. The Scheme will require approval of Stock Exchanges, Creditors, Shareholders, NCLT and other regulatory authorities. #manufacturing #energy #investment /fiinews.com
