August 10, 2023 [Industry Outlook]- ONGC, plans to build two oil-to-chemical plants in India to transform crude oil directly into high-value chemical products as it gets ready for the global energy shift, according to chairman Arun Kumar Singh. One of the main sources of energy is crude oil, which businesses like ONGC extract from underground reservoirs and the seabed.
In oil refineries, it is processed to create jet fuel, diesel, and petrol. Companies all around the world are exploring for innovative ways to use crude oil as the world looks to move away from fossil fuels.
Detergents, fibres, polythene, and other man-made plastics are all produced using petrochemicals, which are chemical compounds obtained from crude oil. “The demand for petrochemicals is expected to remain strong and will continue to be a key driver of oil and gas demand in the future,” Singh stated in the company’s most recent annual report. “ONGC is working with other organisations to investigate potential in the oil to chemical (O2C), refining, and petrochemicals sectors with this goal in mind. Additionally, we want to build two new O2C facilities in India.
The company already operates petrochemical facilities at Mangalore in Karnataka and Dahej in Gujarat through its two subsidiaries, Mangalore Refinery and Petrochemicals Limited and ONGC Petro-Additions Limited. Oil and Natural Gas Corporation (ONGC) stated in the 2022–23 annual report that “MRPL and OPaL are strongly engaged in the diversification plan from oil to the petro-chemical sector.” In order to investigate potential in the oil to chemical and oil to petrochemical industries, ONGC is also collaborating with other parties.
With the use of crude oil-to-chemicals (COTC) technology, crude oil can be directly transformed into high-value chemical products rather than conventional transportation fuels. Compared to the 10% produced by a non-integrated refinery complex, it allows the production of chemicals to reach 70% to 80% of the barrel providing chemical feedstock.
The bulk of COTC plants that are currently in operation or have been proposed are in China and the Middle East. Plans for a COTC plant have been unveiled by Saudi Aramco and SABIC. The facility will use 400,000 barrels of Arabian Light crude oil per day to process around 9 million tonnes of chemicals annually. Petrochemicals are predicted to account for nearly a third of the increase in oil demand by 2030, making them the main driver of global oil consumption.
“ONGC aims to capitalise on this trend, with plans to substantially expand its chemical and petrochemical portfolio from the current 4.2 million tonnes per annum to 8 million tonnes by 2030,” the annual report stated. “MRPL and OPaL are actively involved in the effort to diversify away from the oil industry and into the petrochemical industry. O2C and oil to petrochemicals (O2P) prospects are also being investigated by ONGC in collaboration with other parties. In order to achieve net zero carbon emissions by 2038, Singh stated that ONGC will invest Rs 1 lakh crore in energy transition projects by 2030.
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