Petrochemicals are chemical products derived from crude oil and are used in the manufacturing of detergents, fibres (polyester, nylon, acrylic etc.), polythene and other man-made plastics.
“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 said in the firm’s latest annual report. “With this objective, ONGC is collaborating with other entities to explore opportunities in the oil to chemical (O2C), refining, and petrochemicals. We are also planning to set up two greenfield O2C plants in India.”
He, however, did not give details.
The firm already has two subsidiaries, Mangalore Refinery and Petrochemicals Limited and ONGC Petro-Additions Limited that run petrochemical units at Mangalore in Karnataka and Dahej in Gujarat, respectively.
“MRPL and OPaL are strongly engaged in the diversification plan from oil to the petro-chemical sector,” Oil and Natural Gas Corporation (ONGC) said in the 2022-23 annual report. “ONGC is also partnering with players to explore opportunities in the Oil to Chemical (O2C) and Oil to Petrochemicals (O2P).” The International Energy Agency (IEA) estimates and global oil demand will plateau by 2030 as penetration of electric vehicles and increased uptake of alternative drive technologies for commercial vehicles ebb demand for fossil fuels. And so energy firms around the world are looking at alternatives. Crude oil-to-chemicals (COTC) technology allows the direct conversion of crude oil to high-value chemical products instead of traditional transportation fuels. It enables the production of chemicals exceeding 70 per cent to 80 per cent of the barrel producing chemical feedstock as opposed to about 10 per cent in a non-integrated refinery complex.
China and the Middle East account for a majority of COTC plants that have been planned or have started operations. Saudi Aramco and SABIC have announced plans for a COTC plant that will process 400,000 barrels per day of Arabian Light crude oil to produce about 9 million tonnes of chemicals per year.
According to IEA, petrochemicals are rapidly emerging as the primary driver of global oil consumption, with the industry projected to contribute over a third of the growth in oil demand by 2030.
“ONGC aims to capitalize 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 said. “MRPL and OPaL are strongly engaged in the diversification plan from oil to the petro-chemical sector. ONGC is also partnering with players to explore opportunities in the O2C and oil to petrochemicals (O2P)”.
Singh said ONGC will invest Rs 1 lakh crore by 2030 on energy transition projects as it targets net zero carbon emissions by 2038.
The firm joins fellow state-owned oil and gas firms Indian Oil (IOC), Hindustan Petroleum (HPCL), GAIL and Bharat Petroleum (BPCL) in preparing roadmaps for net zero emissions as part of the nation’s commitment to deal with the climate challenge.
Net-zero for a company means achieving a balance between the quantum of greenhouse gases it places into the atmosphere and the amount it takes out.
While the firm remains focused on raising crude oil and natural gas production, ONGC is being built as resilient, agile and adaptable, Singh said in the firm’s latest annual report.
Recognizing the importance of environmental, social and governance (ESG) aspects, Oil and Natural Gas Corporation (ONGC) has achieved substantial progress in reducing emissions.
“Integrating sustainable practices into our operations have enabled us to lower our Scope-1 and Scope-2 emissions by 17 per cent in the last five years,” he said. “We have set goals to achieve net-zero emissions for Scope-1 and Scope-2 by 2038.”
Scope 1 emissions are from directly emitting sources that are owned or controlled by a company. Scope 2 emissions are from the consumption of purchased electricity, steam, or other sources of energy generated upstream from a company’s direct operations.
ONGC is planning to scale up its renewable portfolio to 10 GW by 2030. “We are committed to spend around Rs 1 lakh crore by the end of this decade, on our multiple green initiatives,” Singh said.
It already has 5 GW of projects planned in Rajasthan and is scouting for a similar capacity. ONGC would also look at offshore wind farms.
ONGC is exploring collaborations with leading players in the energy space on various low carbon energy opportunities including renewables, green hydrogen, green ammonia and other derivatives of green hydrogen.
“Energy Transition is a reality. However, cleaner fuels like natural gas will continue to play an important role for balancing variable renewable energy at scale, while reducing carbon emissions in the short term,” he said.
The company reversed the declining trend of oil and gas production in 2022-23 and is now looking at raising output with projects both on the east and west coasts.
ONGC produced 19.584 million tonnes (MT) of oil in 2022-23, up from 19.545 MT of previous year. The output is likely to rise to 21.263 MT in the current fiscal (April 2023 to March 2024) to 21.525 MT in 2024-25 and 22.389 MT in the following fiscal.
Natural gas output is slated to rise from 20.636 billion cubic meters (bcm) in 2022-23 to 23.621 bcm in 2023-24, 26.08 bcm in the following year and 27.16 bcm in 2025-26.