Reliance’s Gasification Assets to be Restructured and Repurposed

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Reliance Industries Limited’s Board, on Wednesday, has decided to implement a Scheme of Arrangement to transfer Gasification Undertaking into a Wholly-Owned Subsidiary (WOS). The company is going through a transition to high-value materials and chemicals with renewables as the source of meeting its energy requirements.

It is expected that the Scheme will enable RIL to evaluate unlocking the value of syngas, with a collaborative and asset-light approach involving the Induction of investors in the gasifier subsidiary and Capturing the value of up-gradation in RIL through partnerships in different chemical streams. 

As the result, the risk and returns associated with the gasifier assets will likely be different from those involved with the Company’s other operations with optionality in applications for Syngas. The step will possibly attract a pool of investors and strategic partners.

As RIL moves closer to using renewable energy as its principal source of energy, more syngas will be available for conversion into high-value compounds like C1 chemicals and hydrogen. Furthermore, the carbon dioxide emitted during the production of Hydrogen is highly concentrated and easier to absorb, lowering the cost of carbon capture significantly. Overall, these actions will significantly lower the Jamnagar complex’s carbon impact.

India is a fast-growing market, and a shortage of these high-value compounds is projected to persist for the foreseeable future. Repurposing the Gasification assets will enable the use of syngas as a credible source of feedstock for the production of these chemicals, resulting in a lucrative commercial opportunity. RIL will also be well-positioned to be the first to build a hydrogen ecosystem as the hydrogen economy grows.

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