Reliance Industries Ltd will transfer its Jamnagar syngas project to a subsidiary it owns fully with a view to unlock value, a company statement said. Used for energy production, syngas is a combination of hydrogen, carbon monoxide and some carbon dioxide that is typically manufactured by gasifying a solid hydrocarbon fuel.
The transfer will help “unlock the value of syngas” and will help the company’s transition to renewables as its primary source of energy, Reliance Industries Ltd (RIL) said. Syngas ensures reliability in fuel supply and helps reduce volatility in the energy costs. It is used to produce hydrogen in the Jamnagar refinery.
“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,” it added.
“As RIL progressively transitions to renewables as its primary source of energy, more syngas will become available for upgradation to high value chemicals including C1 chemicals and Hydrogen. Further, carbon-di-oxide released during the process of producing Hydrogen is highly concentrated and easy to capture, substantially reducing the cost of carbon capture. Overall, these steps will help sharply reduce carbon footprint of Jamnagar complex,” the statement said.
“The Board has accordingly approved a Scheme to transfer the Gasification Undertaking as a going concern on slump sale basis for a lump sum consideration equal to the carrying value as on the Appointed Date,” the statement said.
The scheme will also enable Reliance to evaluate unlocking the value of syngas, with a collaborative and asset-light approach involving induction of investor(s) in the gasifier subsidiary and capturing value of upgradation in RIL through partnerships in different chemical streams. The appointed date of the scheme would be March 31, 2022 or such other date as may be determined by the board, it noted. The scheme will require the approval of stock exchanges, creditors, shareholders, NCLT and other regulatory authorities.