India's Reliance unveils $9.4 billion plan to boost oil to chemicals

© Reuters. FILE PHOTO: Labourers rest in front of an advertisement of Reliance Industries Limited at a construction site in Mumbai, India, March 2, 2016. REUTERS/Shailesh Andrade

By Nidhi Verma and Sudarshan Varadhan

NEW DELHI (Reuters) - Reliance Industries Ltd, operator of the world's biggest refining complex, will invest 750 billion rupees ($9.38 billion) over 5 years to expand its oil to chemical business, its chairman Mukesh D Ambani said.

"We are committed to maximize oil to chemicals integration and convert our advantageous feedstock streams to high-value chemicals and green materials," Ambani said at an annual shareholders meeting.

Reliance's two refineries at Jamnagar in western India have the capacity to process about 1.4 million barrels per day of crude.

Refiners in India and elsewhere are boosting petrochemicals output to meet rising demand and help hedge against lower margins for conventional fuels as consumption of gasoil and gasoline is set to ease with a global push for clean energy.

Reliance last year announced a plan to invest over $10 billion to build four giga factories at Jamnagar to produce solar cells and modules, energy storage batteries, fuel cells and green hydrogen.

The Group has set an ambitious target to become a net carbon zero company by 2035, aiding the national goal of net zero by 2070 set by Prime Minister Narendra Modi.

Globally oil and gas companies have set varying targets for net zero emissions.

Ambani on Monday announced a plan to set up a fifth giga factory for power electronics.

He said Reliance, already one of the world's largest producers of grey hydrogen, will begin transitioning to green hydrogen by 2025 and expand its solar manufacturing capacity to 20 gigawatts by 2025 for its own consumption.

Reliance is in talks to partner with global electrolyser technology players to set up a giga-scale electrolyser manufacturing facility at Jamnagar to deliver green hydrogen at low cost, he said.

Reliance already has a tie up with Stiesdal for pressurised alkaline electrolyser technology.

As part of its strategy to maximise oil to chemicals integration, Reliance will strengthen its polyester and Vinyl chains by 2026 through building of new facilities and expansion of existing units as well as setting up a carbon fibre plant.

($1 = 79.9290 Indian rupees)