Reliance Industries recasts Jamnagar unit to grow in hydrogen space

Reliance Industries’ (RIL) hiving off its Jamnagar gasification project into a wholly-owned subsidiary is a step towards its plans to grow in the hydrogen space.

This gasification project at Jamnagar was set up to produce syngas to meet the energy requirements of RIL’s crude oil refinery. It, however, could be monetised for expanding the company’s new energy business. “The gasification unit will no longer serve just the refinery,” an RIL official told Business Standard.

The refinery off-gases produced from this project earlier served as fuel. They have now been 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,” RIL said in a statement late Wednesday.

According to Morgan Stanley, RIL’s announcement to separate its pet coke gasifier assets is another step towards monetising the potential synergies between its existing energy infrastructure and new energy plans. 

“While investors have been skeptical about returns on the pet coke gasifier business for the past five years, the environment of high global gas prices, gasifier's ability to produce hydrogen which can be converted into blue hydrogen (using carbon capture), and gasifier output of syngas (valuable in producing higher value add chemicals) — all now make it a highly profitable investment after multiple years of challenges,” it said in a research report.

The RIL official said the volume of blue hydrogen produced from this project can be scaled up as the demand for hydrogen grows. “The gasifier output of carbon dioxide is highly concentrated and can be easily captured, lowering the cost of carbon capture. 

This should also help reduce RIL’s net carbon footprint and eventually help integrate with plans on hydrogen electrolysers and solar/renewable electricity,” Morgan Stanley research report said.

RIL said as the company 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 dioxide 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 the carbon footprint of the Jamnagar complex,” the statement said.