2 Min Read
(Adds details from company statement, background)
MUMBAI, Aug 20 (Reuters) - India's Reliance Industries Ltd is to import 1.5 million tonnes a year of ethane from the United States to use as feedstock for its crackers, as the company looks to take advantage of its investments in the prolific North American shale gas industry.
Crackers using ethane derived from shale natural gas liquids (NGLs) enjoy a cost advantage as it is cheaper than the alternative oil-derived feedstock naphtha for cracking into the petrochemical industry's basic building blocks such as ethylene and propylene.
The company has executed storage and capacity agreements for liquefaction and export of ethane with a North American terminal, which is expected to commence operations in the second half of 2016, the company said in a statement on Wednesday.
The energy conglomerate, which operates the world's biggest refinery complex in a single location in western India, has also invested a total of $7.36 billion as of the end of June in three shale joint-ventures in the United States.
Reliance, controlled by India's richest man Mukesh Ambani, plans to invest an additional $2 billion in shale assets, according to a person with direct knowledge of the company's investment plans.
"Reliance's investments in shale gas and its existing crackers portfolio in India are a natural fit for sourcing ethane from North America and shipping it to India to attain long term feedstock competitiveness," the company said in the statement.
Reliance also said it has placed orders for six very large carriers to ship liquefied ethane to India as well as building storage facilities and pipelines to take the ethane to its crackers. (Reporting by Aman Shah in Mumbai; Editing by David Evans and Greg Mahlich)