RIL commissions cracker unit marking completion of petchem expansion plan

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Source: The Economic Times
Thursday, January 04, 2018

 MUMBAI: Reliance Industries (RIL) has commissioned a giant cracker project, completing its massive petchem capex programme, which Mukesh Ambani said marks a paradigm shift in the profitability of the petrochemicals business. 

With the commissioning of the refinery off-gas cracker (ROGC) unit, the company completed its largest ever capex of around $15 billion on petrochemicals business, which could potentially double the revenue of the business. 

"The world's first ROGC and downstream plants marks a paradigm shift in the profitability and sustainability of RIL's petrochemicals business," Chairman Ambani said in a statement. 

The ROGC complex uses off-gases from RIL's two refineries at Jamnagar as input, making the raw material cost for the unit almost nominal. This will boost the profit margin and help the company compete with low-cost producers from the Middle East and North America. 

Analysts have pegged the commission of this unit as value accretive, with the full impact of it kicking in the next few quarters. 

The ROGC plant will act as a link between the refinery and petrochemical units run by the company. It will turn the off-gas from the refinery to ethylene and propylene, which will go through further value addition at the perches units to deliver high-value polymer. 
RIL said there are 270 ethylene plants globally with a combined capacity of over 170 million tonne per annum (mtpa). With the commissioning of this unit, RIL has a total ethylene capacity of 4 mtpa across five sites. 

"RIL joins the distinguished league of top petrochemical producers globally by doubling its ethylene capacity...With ROGC and imported ethane, RIL has one of the most competitive and flexible cracker portfolio," the company said. 

In the year ended 2016-17, RIL's petchem division clocked revenue of Rs 92,472 crore with operating profit of Rs 12,990 crore. Industry watchers believe the newly commissioned petchem units could drive the revenue and profits to surpass that of its core refinery business. 

The company said the ROGC complex was built in record time with approximately 40% lower capital cost compared to the similar projects globally. 

RIL has capability to produce entire range of PE grades covering all end-uses in the Indian market. 


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