NEW DELHI: The board of Reliance Industries Limited on Wednesday decided to implement a scheme to transfer its gasification undertaking into a wholly-owned subsidiary, Reliance Syngas Limited (RSL).
The company said repurposing the gasification assets will help use syngas as a reliable source of feedstock to produce these chemicals and cater to growing domestic demand, resulting in an attractive business opportunity.
“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,” informed RIL in a statement.
RSL is a company incorporated under the Companies Act, 2013 on November 1.
Syngas as a fuel ensures reliability of supply and helps reduce volatility in energy costs. It is also used to produce hydrogen for consumption in the Jamnagar refinery.
RIL said its main target is to have a portfolio which is fully re-cyclable, sustainable and net carbon zero. This can be achieved by transitioning to high value materials and chemicals with renewables as the source of meeting its energy requirements, said the company.
“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. Overall, these steps will help sharply reduce the carbon footprint of Jamnagar complex,” said RIL.
RIL said India is a high growth market and is expected to continue to see a deficit of these high value chemicals in the foreseeable future.
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.
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 March 31, 2022 or another date as may be determined by the Board, informed RIL.