Reliance Industries to Import 1.5 million tons of Ethane from USA

Reliance Industries Limited(RIL) recently announced plans of investing $2 billion in its shale-gas assets in the United States of America. Furthermore, on 20th August, representatives from the company announced that it will also be sourcing ethane for its petrochemicals complex at Jamnagar from the next fiscal year.

Enhancing Long-term Competitiveness

The official press note went on to say that RIL is implementing a project to source 1.5 million tons per annum of ethane to feed their crackers in India. Ithas signed storage and capacity agreements for liquefaction and export of ethane with a North American terminal. These operations are expected to commence in the second half of 2016. In addition, RIL has ordered 6 state-of-the-art Very large Ethane Carriers (VLECs) that are believed to be the largest vessels to have ever been built in the world. These, too, are expected to be delivered in the last quarter of 2016, syncing with the readiness of the terminal. Further, the note affirmed, “The project will significantly improve the long-term competitiveness of our cracker portfolio through dedicated feedstock, enhanced margins, higher capacity and end-to-end integration.”

Ongoing Expansions at RIL’s Jamnagar Refinery Complex

The existing refinery complex at Jamnagar consists of over 50 processing units. These are designed to process basic feedstock and crude oil. They are used to obtain a variety of finished products deploying major refining processes such as atmospheric and vacuum distillation of crude oil, catalytic cracking and reforming as well as delayed coking.

The project, known as J3, has been designed to increase production capacity for ethylene and other petroleum products. Currently in its third phase of expansion, RIL’s announcement of importing ethane comes closely at the heels of their $37.3 million contract with Siemens for designing, manufacturing and commissioning of 4 steam turbines

Gaining Global Leadership through Capacity Expansion

RIL is now working on expanding the collective capacity of its portfolio of about 20 petrochemical products by 66%. These expansions will be driven primarily by products such as polyethylene/polythene (PE), ethylene, purified terephthalic acid (PTA) and paraxylene(PX). These products are foundation materials for a number of industrial products such as coatings, adhesives, textiles, inks, paints and plastics. Ethane is the second-largest component of natural gas after methane and has replaced liquids as the dominant feedstock for crackers over the last 5 years.

An investment of $8 billion has been made towards this plan. This move will contribute to the company’s aim to increase ethylene capacities to 3.248 million tons per year. This phase-wise expansiontill fiscal year 2017 will boost RIL’s position to the top 5 in the world for most of these products.

The import of ethane from the United States will help ensure a steady flow of raw materials at a rate decided beforehand. This will help bring down costs further and make RIL’s cracker portfolio a highly competitive one.

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