Reliance industry limited has a 15-year vision to build a new energy company. The aim of the company is to recycle CO2, create value from plastic and has an optimal mix of clean and affordable energy. While the oil-to-chemical conglomerate has in recent times seen focus on the consumer’s business, RIL’s core oil-to-chemical (O2C) business is well placed to generate sustained free cash flow.
BofA securities said in a report “Until demand normalizes, RIL is looking to maximize throughput, focus on cost by leveraging deep petrochemical integration and continue to focus on domestic fuel marketing.” Future of O2C is new energy company and partnerships. “RIL has a 15-year vision to build itself as one of the world’s leading new energy and new material companies. It also intends to be a net carbon zero company by 2035. To achieve this, the company is open to work with global financial investors reputed technology partners and start-ups working on futuristic solutions,” it said.
The brokerage said that RIL is looking forward to use CO2 as a recyclable tool, rather than treating it as an emitted waste. With crude processing capacity of 1.24 million barrels per day, Reliance has the single largest refinery site at Jamnagar in Gujarat. Even though the company is a user of crude oil and natural gas, it is searching new ways to convert CO2 into useful products and chemicals.
The company intends to approach the National law tribunal with a proposal to spin off its oil-to-chemical business into a separate subsidiary. In November last year RIL had confirmed its plans of investing Rs. 70,000 crores to establish a crude oil-to-chemical (COTC) complex at Jamnagar facility. RIL’s strategy is to transform the Jamnagar refinery from a producer of transportation fuels to chemical. This new energy business based on the principle of carbon recycling and circular economy is a multi-trillion opportunity for India and the world.
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