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Indias oil and gas producer ONGC is planning to set up two oil-to-chemical plants in the country to convert crude oil directly into high-value chemical products as it prepares for energy transition that is shaking up the industry worldwide, Chairman Arun Kumar Singh said.
Crude oil, which companies like ONGC pump out from below seabed and from underground reservoirs, is a primary source of energy. It is processed in oil refineries to produce petrol, diesel and jet fuel. With the world looking to transition away from fossil fuel, companies around the globe are looking at new avenues to use crude oil.
Petrochemicals are chemical products derived from crude oil and are used in the manufacturing of detergents, fibres (polyester, nylon, acrylic etc.), polythene and other man-made plastics.
"The demand for petrochemicals is expected to remain strong and will continue to be a key driver of oil and gas demand in the future," Singh said in the firms latest annual report. "With this objective, ONGC is collaborating with other entities to explore opportunities in the oil to chemical (O2C), refining, and petrochemicals. We are also planning to set up two greenfield O2C plants in India." He, however, did not give details.
The firm already has two subsidiaries, Mangalore Refinery and Petrochemicals Limited and ONGC Petro-Additions Limited that run petrochemical units at Mangalore in Karnataka and Dahej in Gujarat, respectively.
"MRPL and OPaL are strongly engaged in the diversification plan from oil to the petro-chemical sector," Oil and Natural Gas Corporation (ONGC) said in the 2022-23 annual report. "ONGC is also partnering with players to explore opportunities in the Oil to Chemical (O2C) and Oil to Petrochemicals (O2P)."
The International Energy Agency (IEA) estimates and global oil demand will plateau by 2030 as penetration of electric vehicles and increased uptake of alternative drive technologies for commercial vehicles ebb demand for fossil fuels. And so energy firms around the world are looking at alternatives.
Crude oil-to-chemicals (COTC) technology allows the direct conversion of crude oil to high-value chemical products instead of traditional transportation fuels. It enables the production of chemicals exceeding 70 per cent to 80 per cent of the barrel producing chemical feedstock as opposed to about 10 per cent in a non-integrated refinery complex.
China and the Middle East account for a majority of COTC plants that have been planned or have started operations. Saudi Aramco and SABIC have announced plans for a COTC plant that will process 400,000 barrels per day of Arabian Light crude oil to produce about 9 million tonnes of chemicals per year.
According to IEA, petrochemicals are rapidly emerging as the primary driver of global oil consumption, with the industry projected to contribute over a third of the growth in oil demand by 2030.
"ONGC aims to capitalise on this trend, with plans to substantially expand its chemical and petrochemical portfolio from the current 4.2 million tonnes per annum to 8 million tonnes by 2030," the annual report said. "MRPL and OPaL are strongly engaged in the diversification plan from oil to the petro-chemical sector. ONGC is also partnering with players to explore opportunities in the O2C and oil to petrochemicals (O2P)".
Singh said ONGC will invest ?1 lakh crore by 2030 on energy transition projects as it targets net zero carbon emissions by 2038. |
