New Delhi : Reliance Industries will invest about $ 16 billion in expanding petrochemical production capacity and lower feed and fuel costs to boost profits, reports PTI.

RIL, according to a report by Barclays Equity Research, is investing $ 4.6 billion in an integrated gasification combined cycle (IGCC) project that will convert captive petrocoke to synthetic gas (syngas) which can be used to generate power, steam and hydrogen, which currently are being produced using expensive imported LNG.         Refinery off-gas from this unit will be used to extract petrochemical compounds like ethane, ethylene, propylene, butanes and propanes at a $ 4.5 billion Refinery off-gas cracker (ROGC). Another $ 5 billion is being spend on expanding polyester production capacity. The firm will spend another $ 1.5 billion to import ethane from US to replace higher cost propane imports and naphtha, it said. The projects will be completed by FY18.

“Reliance is in the midst of a $ 16 billion capex plan to raise polyester capacity by some 60 per cent in aggregate across four locations, to set up a new 1.5 million tonnes refinery off-gas based petrochemical cracker and downstream units in Jamnagar, enhance refining profitability via petcoke gasification and to reduce feedstock costs for petrochem by importing cheap US ethane,” it said.

Barclays said the projects will help add an estimated $1.2 billion to pre-tax profit and Rs 14 per share to earnings per share (EPS) by FY18.

(To receive our E-paper on whatsapp daily, please click here. We permit sharing of the paper's PDF on WhatsApp and other social media platforms.)

Free Press Journal

www.freepressjournal.in