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RIL project seen bumping up petrochemicals core profit by $300 mn

This is the first time ethane is sourced from US to India; total investment to be recovered in 4 yrs

Amritha Pillay  |  Mumbai 

Reliance Industries, RIL, Reliance
A man walks past an advertisement of Reliance Industries Limited at a construction site in Mumbai (File photo: Reuters)

Ltd's (RIL’s) first-of-its-kind import project is expected to add $300 million to the operating profit of the petrochemicals business, Vipul Shah, chief operating officer of petrochemicals, told reporters in a media briefing on Wednesday.


To secure feedstock for its three cracker facilities at Dahej, Nagothane and Hazira, invested about $1.6 billion to import from the to use as feedstock and produce ethylene at these facilities.

For the financial year 2016-2017, the company reported earnings before interest and tax (Ebit) of Rs 12,990 crore in the petrochemicals business.

"The total investment in this project will be recovered in four years’ time," said Vipul Shah, chief operating officer for petrochemicals for The $1.6-billion investment included building six very large carriers (VLEC), pipelines connecting facilities, modification of facilities to receive and other storage and related infrastructure to source from the to

Company officials expect feedstock cost on an overall basis to reduce by 30 per cent with the usage of

"The three cracker sites have been revamped to crack and increase ethylene capacity," the firm said. Company officials added, with the use of and modification of its facilities, its ethylene capacity will increase by 0.2 million tonnes from the current 1.9 MT to 2.1 MT.

This is the first time is being sourced from to Upto May 2017, the company said, it imported 416 Kilo Tonnes of ethane, amounting to total of 9 VLEC cargoes making it the largest importer of from

The company will import close to 1.6 million tonne of every year for these facilities. Company officials added there are 20-year long term contracts in place for sourcing from Imported is expected to reduce the use of naptha at the Hazira cracker facility, and will help increase utilization at the other two crackers which was struggling due to non-availability of natural gas. uses about 2.5 million tonnes of naptha at its crackers, imports are likely to replace this by 20% to 25%, company officials added. This change will also make more naptha available for exports.  

"The supply of to crackers at Dahej, Hazira and Nagothane will provide feedstock security and flexibility, enabling to select the most optimal feed mix based on market conditions," the company said in its statement.

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