Reliance Industries to recast Jamnagar gasification unit as a subsidiary
Repurposing the gasification assets will help use of syngas as a reliable source of feedstock to produce chemicals and cater to growing domestic demand. As the hydrogen economy expands, RIL will be the first-mover to set up a hydrogen ecosystem.
November 25, 2021 / 09:11 AM IST
RIL Chairman Mukesh Ambani
Reliance Industries' (RIL) board on November 24 announced that it has decided to implement a scheme of arrangement (Scheme) to transfer Gasification Undertaking into a wholly-owned subsidiary (WOS).
"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 energy costs. Syngas is also used to produce Hydrogen for consumption in the Jamnagar refinery," the company said in a regulatory filing.
Repurposing the gasification assets will help use of syngas as a reliable source of feedstock to produce chemicals and cater to growing domestic demand, resulting in an attractive business opportunity. Further, as the hydrogen economy expands, RIL will be well-positioned to be the first mover to establish a hydrogen ecosystem, the statement added.
The Scheme will also enable RIL to evaluate unlocking the value of syngas, with a collaborative and asset-light approach involving the induction of investors in the gasifier subsidiary and capturing value of upgradation in RIL through partnerships in different chemical streams.
Shares of RIL on Wednesday settled nearly 1.5 percent lower at Rs 2,350.90 apiece on the BSE.Disclaimer: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.