State-owned Oil and Natural Gas Corporation (ONGC) will set up a unit to house its gas business and clean energy projects such as green hydrogen.

Last month, the Ministry of Petroleum and Natural Gas approved the setting up of a wholly-owned subsidiary company for the entities.

“The proposed name of the company is ‘ONGC Green Limited’ subject to the approval of the Ministry of Corporate Affairs, Government of India,” ONGC informed the bourses.

The state-run company said its board on Tuesday approved the formation of the venture.

The wholly-owned subsidiary company is meant for value-chains of energy business such as green hydrogen, hydrogen blending, renewable energy (solar, wind and hybrid), biofuels/ biogas business and LNG.

The nation’s largest oil and gas producer plans to spend Rs 1 lakh crore on installing 10GW of renewable energy capacity and setting up two million tonnes of green ammonia annual production capacity by 2035.

ONGC in February 2021 proposed a separate unit for importing LNG and trading in gas.

It is India’s largest gas producer but does not trade in the fuel. It sells most of the gas it produces from fields in Mumbai offshore and other places to buyers identified by the government.

The government also sets the price at which it would sell most of the natural gas, which is used to generate electricity, produce fertilisers and turned into CNG.

The company also said its board has accorded in-principle approval to a joint venture company either directly or through an affiliate with NTPC Green Energy Ltd, a wholly-owned subsidiary of NTPC Ltd.

“The said joint venture company shall be engaged in the business of offshore wind energy and other renewal energy,” ONGC said.

ONGC in September last year inked an agreement with NTPC Green Energy Limited for the development of renewable energy projects.