Reliance Industries (RIL) handing over its Jamnagar gasification project to a wholly owned subsidiary is a step towards its growth plans in the hydrogen space.
This Jamnagar gasification project was set up to produce syngas to meet the energy needs of RIL’s crude oil refinery. However, it could be monetized to develop the company’s new energy activities. “The gasification unit will no longer serve just the refinery,” an RIL official told Business Standard.
The refinery gaseous effluents produced by this project were previously used as fuel. They have now been reused as feedstock for the Refinery Gas Cracker (ROGC). “This allows the production of olefins at competitive investment and operating costs. Synthesis gas as a fuel ensures reliability of supply and helps reduce volatility in energy costs. The syngas is also used to produce hydrogen for consumption at the Jamnagar refinery, ”RIL said in a statement Wednesday evening.
According to Morgan Stanley, RIL’s announcement to separate its petroleum coke gasification assets is another step towards monetizing the potential synergies between its existing energy infrastructure and new energy plans.
“While investors have been skeptical of the returns from the petroleum coke gasification business over the past five years, the environment of high global gas prices, the gasifier’s ability to produce hydrogen may be converted to blue hydrogen (using carbon capture) and the production of syngas gasification (useful for producing higher value added chemicals) – now makes it a very profitable investment after several years of challenges ”, he said in a research report.
The RIL official said the volume of blue hydrogen produced from this project can be increased as the demand for hydrogen increases. “The gasifier’s carbon dioxide production is highly concentrated and can be easily captured, reducing the cost of carbon capture.
It should also help reduce RIL’s net carbon footprint and eventually fit into plans for hydrogen electrolyzers and solar / renewable electricity, ”the Morgan Stanley research report said.
RIL said as the company shifts to renewables as its primary energy source, more syngas will become available for upgrading to high value chemicals, including chemicals. C1 and hydrogen. “In addition, the carbon dioxide released during the hydrogen production process is highly concentrated and easy to capture, which significantly reduces the cost of carbon capture. Overall, these measures will help to significantly reduce the carbon footprint of the Jamnagar complex, ”the statement said.