RIL to add $300 - $400 m in operating profit this fiscal by replacing naphtha with ethane
Industries Ltd (RIL) will add $300 - $400 million to its operating profit this fiscal by increasing the amount of ethane used as feedstock in its petrochemical plants. RIL’s revenue from its petrochemical business stood at ` 87,623 crore for FY17.
This savings in cost by using cheaper ethane is due to RIL’s ethane import project — which involved buying cryogenic ethane (stored at -90°C), transporting the ethane to India in custom-made ships (very large ethane carriers or VLECs) ordered from Samsung Industries, Korea, and building pipelines to transport the ethane to the petrochemical plants at Dahej, Hazira and Nagothane — cost $1.6 billion and took two-anda-half years to build.
The facility allows the company to import 1.6 million tonnes of ethane every year, making RIL the largest importer of ethane from the US.
RIL’s gas crackers at Dahej (Gujarat) and Nagothane (Maharashtra) will run at full capacity using ethane as feedstock, while also contributing to producing 33 per cent of ethylene from the Hazira (Gujarat) cracker, in place of the more expensive naphtha. This is expected to add 200,000 tonnes of additional ethylene making RIL the lowest cost producer of ethylene in this part of the world, according to Vipul Shah, COO, Petrochemicals, RIL
RIL uses 2.5 million tonnes a year of naphtha as feedstock in petrochemical crackers and ethane will reduce its use by 500,000 tonnes, which can be exported. At Dahej, the company has built the world’s largest cryogenic ethane storage tank, the size of a cricket stadium. RIL is also close to completing a dedicated 480 km underground ethane pipeline which will transport the gas from Dahej to its two other crackers in Hazira and Nagothane.