Oil and Natural Gas Corp. Ltd.’s (ONGC) board has approved an investment of more than $1 billion to build new petrochemical complexes in India as part of the operator’s plan to increase production capacity of its existing petrochemicals portfolio.
Amid projections of a continued waning demand for crude-oil based transportation fuels, ONGC’s board has greenlighted a plan to invest about 1 trillion rupees ($1.2 billion) by 2028 or 2030 on two projects involving construction of two grassroots petrochemical complexes, each of which would be sited in separate Indian states, the operator said in its Nov. 15 quarterly earnings call with investors.
The new projects are intended to boost ONGC’s current petrochemical production capacity of about 3.4 million tonnes/year (tpy) to at least somewhere between 8.5-9 million tpy by 2030, the company said.
ONGC said that while its board has approved moving forward with the planned investment projects—at least one of which would likely involve some type of a joint-venture partnership—both projects still remain subject to necessary approvals and support by India’s applicable regulatory bodies, including the country’s Ministry of Petroleum and Natural Gas and Cabinet Committee on Economic Affairs.
ONGC declined to reveal in which of India’s states the proposed complexes would be located and disclosed no additional details about either project.
Announcement of the newly proposed petrochemical projects follows ONGC’s disclosure in its 2022-23 annual report that the company is examining multiple brownfield and greenfield options for increasing its current petrochemical production capacity based on the International Energy Agency’s the petrochemical industry will become the primary driver of oil consumption, contributing to more than a third of growth in oil demand by 2030.
The petrochemical focus comes as part of ONGC’s Energy Strategy 2040, under which it plans to gradually diversify its business from the oil to petrochemical sector as part of its transformation strategy to balance current energy needs on its journey to a lower-carbon future in line with the global energy transition, according to the operator’s annual report.
During its Aug. 29 annual general meeting, ONGC also revealed it is also collaborating with “other entities” to explore opportunities for setting up two oil-to-chemical (O2C) grassroots plants within India that would use O2C technology to enable transforming 40-60% of crude oil feedstock directly into chemicals.
The proposed O2C plants seemingly will come in addition to the planned petrochemical projects announced on Nov. 15.
ONGC currently produces petrochemicals through subsidiaries Mangalore Refinery & Petrochemicals Ltd. (MRPL) and ONGC Petro additions Ltd. (OPaL).
At its 15-million tpy integrated refining and petrochemical complex in Karnataka, Mangalore, , MRPL houses a gas-phase polypropylene plant capable of producing a complete range of homopolymer grades.
Located along the longest coastline of India’s Gujarat state at Dahej, OPaL’s petrochemical complex includes the following unit capacities:
- 340,000 tpy; high-density polyethylene (HDPE).
- 720,000 tpy; swing HDPE, linear-low density polyethylene (LLDPE).
- 340,000 tpy; polypropylene.
- 150,000 tpy; benzene.
- 115,000 tpy; butadiene.
- 70,000 tpy; carbon black.
- 165,000 tpy; hydrogenated pyrolysis gasoline.