The board of Reliance Industries has decided to transfer its gasification business into a wholly-owned subsidiary.
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 re-purposed into feedstock for the refinery off gas cracker. This enables production of olefins at competitive capital and operating costs, the company said in a late night press release.
Syngas as a fuel ensures reliability of supply and helps reduce volatility in the energy costs. Syngas is also used to produce hydrogen for consumption at Jamnagar unit.
RIL is aiming to create a portfolio which is fully re-cyclable, sustainable and net carbon zero. As RIL progressively transitions to renewables as its primary source of energy, more syngas will become available for upgradation to high value chemicals including C1 chemicals and hydrogen.
The Reliance board approved a scheme to transfer the gasification undertaking as a going concern on a slump sale basis for a lump sum consideration equal to the carrying value as on the appointed date.
The scheme will allow RIL to evaluate ways to unlock the value of syngas with a collaborative and asset light approach.
The company will be looking to induct investors in the gasifier subsidiary and capture the value of upgradation in RIL through partnerships in different chemical streams.
The appointed date for the implementation of the scheme has been fixed as March 31 next year. It will require the approval of stock exchanges, creditors, shareholders, national company law tribunal (NCLT) and other regulatory authorities, the note said.