Ril Gets Cracking On Jamnagar Unit To Boost Volumes

Two months after it commissioned its first cracker with a capacity of 7.5 lakh tonnes at Hazira, Reliance Industries Ltd (RIL) is working on a second, bigger cracker to come up at Jamnagar in Gujarat.

The ethylene cracker will have a capacity of between eight and 10 lakh tonnes and be located close to Reliance Petroleums refinery at Jamnagar. On beginning production, the refinery will provide the cracker with its feedstock besides feeding the Hazira cracker, which is presently sourcing its naphtha requirements through domestic refiners and imports.

The second cracker will form a part of RILs petrochemical complex and produce ethylene and other downstream products like polyethylene, ethylene oxide and ethylene glycol.

 

Apart from the refinery and the petrochemical complex, Reliance is also building a 30 million tonne port at Jamnagar, which will handle import and export of various commodities.

The petrochemical complex will also produce purified terephthalic acid (PTA) to the tune of five lakh tonnes. The capacities of some products like polyethylene and ethylene glycol have not been finalised as of yet, though initial estimates are that the company is working on a capacity of over two lakh tonnes for polyethylene.

A major portion of the crackers output will be consumed in-house in downstream polymer products. With plans for the cracker firmly in place, RILs investment in Jamnagar is expected to go up. As compared to Hazira where the company invested Rs 9,000 crore, in Jamnagar the figure is expected to spiral to Rs 25,000 crore. The investment will include Rs 12,000 crore for constructing a 22 million tonne petroleum refinery in Jamnagar.

Compared with Hazira, Jamnagar will be a huge complex. Nearly 70,000 people will be working on the site as against 25,000 for Hazira, industry sources said. RIL had, last year, announced an investment of Rs 5,000 crore in the petrochemical complex in Jamnagar. The complex was to include three paraxylene plants of 1.4 million tonnes and a four lakh tonne polypropylene plant. The proposed PTA plant will utilise paraxylene.

Reliance will have to keep investing as thats the only way they can keep tax outgos down. Otherwise, tax outgos will hit them badly, say analysts tracking the company. The completion schedule for the cracker is not known, but commissioning is expected only after 1998, when the first of the three paraxylene plants comes on stream. Industry sources say the cracker start-up could be only after 2000 AD.