Reliance Industries Ltd (RIL) has informed in an exchange filing that the company will restructure and repurpose its gasification assets. The Mukesh Ambani-led company’s board decided to implement a ‘Scheme of Arrangement’ to transfer the ‘Gasification’ undertaking into a wholly-owned subsidiary (WOS). The board approved it given a growing concern on a slump sale basis for a lump sum consideration equal to the carrying value as on the Appointed Date.
“The Scheme will also enable RIL to evaluate unlocking the value of syngas, with a collaborative and asset-light approach involving (a) Induction of investor(s) in the gasifier subsidiary and (b) Capturing value of up-gradation in RIL through partnerships in different chemical streams,” the conglomerate added. The appointed date of implementation of the scheme is expected to be March 31, 2022, unless stated otherwise by the Reliance Industries board. The transfer will require the approval of Stock Exchanges, Creditors, Shareholders, NCLT and other regulatory authorities.
RIL plans to curate a portfolio of recyclable, sustainable and net carbon zero projects. “This will be achieved by transitioning to high-value materials and chemicals with renewables as the source of meeting its energy requirements,” the company said in their statement. “As RIL progressively transitions to renewables as its primary source of energy, more ‘syngas’ will become available for up-gradation to high-value chemicals including ‘C1 chemicals and hydrogen’.”
The company further discussed that the carbon dioxide released during the production of hydrogren is highly concentrated and easy to capture, substantially reducing the cost of carbon capture. “The gasification project at Jamnagar was set up with the objective to produce syngas to meet the energy requirements as refinery off-gases, which earlier served as fuel, were repurposed into feedstock for the Refinery Off Gas Cracker (ROGC). This enables the production of olefins at competitive capital and operating costs,” said RIL in an exchange filing. “Overall, these steps will help sharply reduce carbon footprint of the Jamnagar complex,” they said.
According to the exchange filing, RIL believes that repurposing the gasification assets will create new business opportunities for the company where the use of ‘syngas’ will become a reliable source of feedstock to produce these chemicals and cater to growing domestic demand. “Further, as the hydrogen economy expands, RIL will be well-positioned to be the first mover to establish a hydrogen ecosystem,” they stated.