Reliance Plans To Produce Only Jet Fuel, Petrochemicals At Jamnagar Refinery
Reliance Industries’ Jamnagar refinery in Gujarat. (Photographer: Rajan Chaughule/Bloomberg News)

Reliance Plans To Produce Only Jet Fuel, Petrochemicals At Jamnagar Refinery

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Billionaire Mukesh Ambani’s Reliance Industries Ltd. plans to produce only jet fuel and petrochemicals at its Jamnagar refinery in Gujarat, as part of its oil-to-chemicals strategy that will eliminate most fuels it produces in favour of high-value products.

RIL wants to make its Jamnagar refinery future-ready as fuel demand patterns undergo changes with the advent of electric vehicles.

"Jamnagar shall be the refinery icon of the world with best-in-class performance," RIL said in its annual report for 2018-19. The firm's mission is to "ensure the Jamnagar refinery is future-ready with a strategic transformation to optimal oil-to-chemicals."

RIL refineries, at present, convert crude oil into petrol, diesel, liquified petroleum gas, aviation turbine fuel, naphtha and other value-added fuels. Some of these products are used to produce petrochemicals used for making plastics and other products.

Now, the refiner is implementing an oil-to-chemicals strategy that will convert crude oil only into petrochemicals and jet fuel.

"RIL has developed a future-ready oil-to-chemicals strategic vision to progressively, transform the Jamnagar refinery from a leading producer of fuels to chemicals," it said in the annual report.

The fundamentals of the Jamnagar oil-to-chemicals strategy are to employ advanced molecule management to upgrade the refinery intermediate streams by value.

"The oil-to-chemicals programme is a roadmap implemented over a long time horizon, based on market outlook and price triggers for refinery fuel products. The ultimate goal is to achieve greater than 70 percent conversion of crude refined in Jamnagar, to competitive chemical building blocks of olefins and aromatics.

"The Jamnagar refinery product slate, at the culmination of oil-to-chemicals transition, shall be only jet fuels and petrochemicals," it said.

India's oil refining capacity far outpaces its fuel demand. And while the fuel demand is tapering, state-owned refiners have planned massive expansion plans, which some analysts have questioned in view of the massive push by the government towards electric vehicles and moving away from polluting hydrocarbon-based liquid fuels.

RIL said the objectives of this plan is 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 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 initial stage. Final fuel derisking shall target elimination of gasoline, alkylate and diesel, synchronised to the global evolution of E-mobility and transport fuel demand decline.”

With global petrochemicals demand is seen growing at a faster rate than fuel in longer term, some companies are investing to integrate refinery to petchem to maximise yields of petrochemicals from every barrel of oil processed.

This can possibly lead to significant cost savings through economies of scale and improve competitiveness of companies undertaking such projects.

New complexes in Asia and the Middle East have announced projects with 25-40 percent crude to chemical conversion.

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