Reliance to ship cheap ethane from US to reduce costs

RIL IS LIKELY TO INVEST ₹6,000 CR TO CREATE FACILITIES FOR STORING LIQUEFIED ETHANE AND GET SIX LARGE CARRIERS FOR THE FEED STOCK

NEW DELHI: Known for its endto-end integration to minimise production costs, India’s largest petrochemical producer, Reliance Industries Ltd (RIL), on Wednesday said it will ship cheap ethane — a feed stock used to produce petrochemicals — from the US.

Ethane is produced from shale gas and Reliance is already producing shale gas from its assets in North America that it purchased with an investment of $6 billion (₹36,000 crore).

Sources said the company will be investing over $1 billion (₹6,000 crore) towards creating facilities for storing liquefied ethane and in getting six very large ethane carriers (VLECS), which will be the largest vessels ever built in the world. A pipeline carrying ethane to its plants will also be built.

“Reliance is implementing a project to source 1.5 MMTPA of ethane from US to feed its crackers in India… The project will significantly improve the long term competitiveness of our portfolio through dedicated feedstock, enhanced margins, higher capacity and end-to-end integration,” the company said in a statement. It added that the company’s investments in shale gas and its existing crackers portfolio in India are a natural fit for sourcing ethane from North America to attain long term feedstock competitiveness.

Reliance said it has executed storage and capacity agreements for liquefaction and export of ethane with a North American Terminal. “The ships are expected to be delivered starting last quarter of 2016 in synchronisation with readiness of the terminal,” the statement said.