India’s largest oil and fuel producer plans to speculate about one trillion rupees in organising two petrochemical crops to transform crude oil straight into high-value chemical merchandise because it prepares for the vitality transition, senior firm officers mentioned on Wednesday.
Crude oil, which firms like ONGC pump from the seabed and underground reservoirs, is a significant supply of vitality. It’s processed in oil refineries to supply gasoline, diesel, and jet gas. Because the world appears to be like to maneuver away from fossil fuels, firms around the globe are in search of new methods to make use of crude oil.
Petrochemicals are chemical merchandise derived from crude oil and used within the manufacture of detergents, fibers (polyester, nylon, acrylic, and so on.), polythene, and different man-made plastics.
In a name to buyers on the corporate’s second-quarter earnings, Oil and Pure Gasoline Company (ONGC) CFO Bhumila Jaspal mentioned the corporate is trying to construct separate oil-to-chemicals (O2C) tasks.
However she didn’t give particulars.
“Now we have plans to speculate Rs 10,000 crore by 2028 or 2030 in two tasks in two separate states,” D Adhikari, government director and head of joint ventures and enterprise improvement at ONGC, mentioned within the investor name.
“Our plan is to lift petrochemical manufacturing capability to eight.5-9 million tons by 2030.”
One of many tasks is more likely to be arrange by ONGC alone and the opposite in a three way partnership. Particulars weren’t shared on the decision.
Demand for petrochemicals, the fundamental parts of plastics, fertilizers and prescribed drugs, is predicted to stay sturdy attributable to their wide selection of makes use of in massive industries, together with development, cars and electronics. Strengthening its chemical compounds enterprise may even assist the state-run oil exploration firm cut back its dependence on the unstable oil market and enhance long-term profitability.
ONGC already has two subsidiaries – Mangalore Refinery and Petrochemicals Restricted (MRPL) and ONGC Petro-Additions Restricted (OPaL) which function petrochemical models at Mangalore in Karnataka and Dahej in Gujarat, respectively.
Whereas MRPL is a profit-making entity, OPaL has a “distorted” capital construction, Adhikari mentioned.
To rectify this, ONGC’s board has authorized a capital infusion of Rs 18,355 crore in OPaL to lift its stake within the firm to over 96 per cent from the present 49.35 per cent.
GAIL (India) Ltd presently holds 49.21 per cent and the remaining 1.43 per cent is owned by Gujarat State Petrochemical Company (GSPC).
Solely ONGC is doing the fairness infusion, which can result in GAIL exiting the three way partnership.
This can “briefly” make OPaL a subsidiary of ONGC however the firm desires to retain the three way partnership nature of the corporate and can look to amass a strategic associate within the subsequent three years, he mentioned.
He mentioned the fairness infusion will assist OPaL flip round and obtain profitability within the monetary 12 months 2024-2025.
The Worldwide Power Company (IEA) estimates that international oil demand will stabilize by 2030, because the unfold of electrical automobiles and elevated adoption of different drive applied sciences for business automobiles cut back demand for fossil fuels. Subsequently, vitality firms around the globe are in search of options.
Crude oil to chemical compounds (COTC) expertise permits the direct conversion of crude oil into high-value chemical merchandise as a substitute of conventional transportation fuels. It allows chemical manufacturing of 70 % to 80 % of the chemical feedstock produced in barrels versus about 10 % in a non-integrated refining complicated.
China and the Center East signify the vast majority of CO2 crops which can be deliberate or have begun operations. Saudi Aramco and SABIC have introduced plans to determine a COTC plant that may course of 400,000 barrels per day of Arabian Mild crude oil to supply about 9 million tons of chemical compounds yearly.
ONGC goals to capitalize on this pattern, with plans to considerably broaden its chemical compounds and petrochemicals portfolio from the present degree of 4.2 million tons every year to eight.5-9 million tons by 2030, Adhikari mentioned.
The funding in O2C crops is separate from ONGC’s introduced funding of Rs 1 trillion in vitality transition tasks by 2030, which can assist it obtain internet zero carbon emissions by 2038.
Internet zero for a corporation means balancing the quantity of greenhouse gases it releases into the ambiance with the quantity it expels.
ONGC plans to extend its renewable vitality portfolio to 10 GW by 2030.
(Tags for translation) Oil and Pure Gasoline Company