Mumbai: Billionaire Mukesh Ambani's Reliance Industries Ltd has decided to restrict its mega Jamnagar refinery complex to only produce jet fuel and petrochemicals as it gets future ready with an oil-to-chemical strategy that would focus on value-added products by discontinuing all fuels the company produces.
The new strategy would mean that the Jamnagar refinery would gradually reduce the production of auto fuels such as petrol, diesel, the consumption is expected to decline with the penetration of electric vehicles. Already, in the first quarter of FY20, fuel demand has shrunk resulting in a double digit fall in India's crude imports in June.
"Jamnagar shall be the refinery icon of the world with the best-in-class performance," RIL said in its latest annual report.
It said the firm's mission was to "ensure the Jamnagar refinery is future-ready with a strategic transformation to optimal oil-to-chemicals".
The RIL refinery currently converts crude oil sourced from around the globe into petrol, diesel, LPG, aviation turbine fuel (ATF), LPG, naphtha and other value-added fuels. Under the revised strategy, crude oil will be used to convert it into petrochemicals and ATF.
The new RIL strategy is devised on the basis of ground realities. Globally, refining and marketing earnings have declined almost 20 per cent in 2018. At $9.2 per barrel, though RIL's refining margin has remained relatively strong even in a dynamic and volatile market, future is indicating tougher days that need an early preparation.
Already in the country, there is surplus refining capacity and public sector undertakings (PSUs) are adding new production lines that will create additional capacity. The government's electric vehicle focus is also expected to further dent the demand.
The fundamentals of the Jamnagar oil-to-chemical strategy are to employ advanced molecule management to upgrade the refinery's intermediate streams by value.
"The oil-to-chemical programme is a roadmap implemented over a long time horizon, based on the market outlook and price triggers for refinery fuel products. The ultimate goal is to achieve greater than 70 per cent conversion of crude refined in Jamnagar, to competitive chemical building blocks of olefins and aromatics," the annual report said.
RIL plans to preserve as well as upgrade existing refinery margins, while maximising asset utilisation for a sustainable competitive cost of chemicals.
It has developed a disruptive technology innovation, a Multizone Catalytic Cracking (MCC) process, which converts a wide range of feedstock to high value propylene and ethylene in a single riser.
"All refined products priced below crude shall be eliminated for chemicals at the initial stage. Final fuel de-risking shall target elimination of gasoline, alkylate and diesel, synchronised to the global evolution of E-mobility and transport fuel demand decline," it said.
As part of the oil-to-chemical strategy, RIL is already implementing multi-billion dollar projects. The company has built the world's first ever Refinery Off-Gas Cracker (ROGC) complex of 1.5 million tonnes per annum and is importing ethane from the US to produce petrochemicals.
|State Capitals (Applicable from 6:00 a.m. on 12-08-2019)||Petrol Current Price(Per Lt)||Petrol Previous Price(Per Lt)||Change(Rs)|
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