Reliance Industries Ltd(RIL) on Wednesday announced that its board has decided to implement a Scheme of Arrangement (Scheme) to transfer Gasification Undertaking into a wholly-owned subsidiary (WOS).
"The Gasification project at Jamnagar was set up with the objective to produce syngas to meet the energy requirements as refinery off-gases, which earlier served as fuel, were repurposed into feedstock for the Refinery Off Gas Cracker (ROGC). This enables production of olefins at competitive capital and operating costs. Syngas as a fuel ensures reliability of supply and helps reduce volatility in the energy costs. Syngas is also used to produce Hydrogen for consumption in the Jamnagar refinery," the company said in a regulatory filing.
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"Repurposing the Gasification assets will help use syngas as a reliable source of feedstock to produce these chemicals and cater to growing domestic demand, resulting in an attractive business opportunity," the statement read, while further adding "as the hydrogen economy expands, RIL will be well positioned to be the first mover to establish a hydrogen ecosystem."
The Scheme will also enable RIL to evaluate unlocking the value of syngas, with a collaborative and asset-light approach involving (a) Induction of investor(s) in the gasifier subsidiary and (b) Capturing value of upgradation in RIL through partnerships in different chemical streams.
The appointed date of the Scheme is March 31, 2022.
Watch the accompanying video of CNBC-TV18’s Sonal Bhutra for more details.
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