India’s prime oil and fuel producer ONGC plans to invest about ₹1 lakh crore in setting up two petrochemical plants to convert crude oil immediately into high-value chemical merchandise because it prepares for power transition, prime firm officers stated on Wednesday.
Crude oil, which corporations like ONGC pump out from under seabed and underground reservoirs, is a main supply of power. It is processed in oil refineries to produce petrol, diesel and jet gas. With the world trying to transition away from fossil fuels, corporations across the globe are taking a look at new avenues to use crude oil.
Petrochemicals are chemical merchandise derived from crude oil and used within the manufacturing of detergents, fibres (polyester, nylon, acrylic and so on.), polythene and different man-made plastics.
At an investor name on the corporate’s second-quarter earnings, Oil and Natural Gas Corporation (ONGC) Director (Finance) Pomila Jaspal stated the agency is trying to construct separate oil-to-chemical (O2C) tasks.
She, nevertheless, didn’t give particulars.
“We have plans to invest ₹1,00,000 crore by 2028 or 2030 in two projects in two separate states,” stated D Adhikari, Executive Director and Chief of Joint Ventures & Business Development, ONGC, on the investor name.
“Our plan is to raise petrochemical capacity to 8.5-9 million tonnes by 2030.” One undertaking is probably going to be set up by ONGC by itself and the opposite in a three way partnership. The particulars weren’t shared within the name.
Demand for petrochemicals, the constructing blocks for plastics, fertilisers and prescription drugs, is projected to stay sturdy due to their wide selection of makes use of throughout giant industries, together with development, automotive and electronics. Strengthening its chemical compounds enterprise can even assist the state-run oil explorer minimize its reliance on the unstable oil market and enhance profitability in the long term.
ONGC already has two subsidiaries Mangalore Refinery and Petrochemicals Limited (MRPL) and ONGC Petro-Additions Limited (OPaL) that run petrochemical models at Mangalore in Karnataka and Dahej in Gujarat, respectively.
While MRPL is a profit-making entity, OPaL has a “distorted” capital construction, Adhikari stated.
To right this, the ONGC board has accredited infusing ₹18,355 crore capital in OPaL to increase its stake within the agency to over 96% from the present 49.35%, he stated.
GAIL (India) Ltd at present has 49.21% and the remaining 1.43% is with Gujarat State Petrochemical Corp (GSPC).
Only ONGC is doing the fairness infusion, which is able to all however edge GAIL out of the three way partnership.
This, he stated, would “temporarily” make OPaL a subsidiary of ONGC however the firm needs to retain the three way partnership nature of the corporate and can look to get a strategic associate within the subsequent three years.
The fairness infusion will assist OPaL flip round and turn into worthwhile in fiscal 2024-25, he stated.
The International Energy Agency (IEA) estimates that world oil demand will plateau by 2030 as penetration of electrical autos and elevated uptake of other drive applied sciences for business autos ebb demand for fossil fuels. And so power corporations around the globe are taking a look at options.
Crude oil-to-chemicals (COTC) expertise permits the direct conversion of crude oil to high-value chemical merchandise as a substitute of conventional transportation fuels. It allows the manufacturing of chemical compounds exceeding 70% to 80% of the barrel-producing chemical feedstock as opposed to about 10 per cent in a non-integrated refinery complicated.
China and the Middle East account for a majority of COTC plants which were deliberate or have began operations. Saudi Aramco and SABIC have introduced plans for a COTC plant that can course of 4,00,000 barrels per day of Arabian Light crude oil to produce about 9 million tonnes of chemical compounds per 12 months.
ONGC goals to capitalise on this pattern, with plans to considerably broaden its chemical and petrochemical portfolio from the present 4.2 million tonnes every year to 8.5-9 million tonnes by 2030, Adhikari stated.
The funding in O2C plants is separate from the Rs 1 lakh crore funding ONGC has introduced in power transition tasks by 2030, which is able to assist it obtain internet zero carbon emissions by 2038.
Net zero for an organization means attaining a steadiness between the quantum of greenhouse gases it locations into the ambiance and the quantity it takes out.
ONGC plans to scale up its renewable portfolio to 10 GW by 2030.
