India’s largest crude oil and natural gas company ONGC intends to make an investment of INR 1 lakh crore towards increasing its petrochemical production capacity. The investment involves the installation of new facilities which create chemicals directly from oil. ONGC’s Mangalore Refinery and Petrochemicals Limited (MRPL) and ONGC Petro additions Limited (OPaL) subsidiaries will be carrying out the company’s plans.
Oil and Natural Gas Corp (ONGC) is planning to invest INR 1 lakh crore by 2030 for installing new facilities to create chemicals directly from oil, in a bid to increase its petrochemicals production capacity. ONGC’s plans are expected to be carried out through its Mangalore Refinery and Petrochemicals Limited (MRPL) and ONGC Petro additions Limited (OPaL) subsidiaries. ONGC’s plans intend to raise the combined annual petrochemical capacity of MRPL and OPaL to over 8 million TPA by 2030.
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The growth project involves two major projects, in which the plants will either use alternative feedstocks or crude to make chemicals. The crude that ONGC produces can also serve as a feedstock for its crude-to-chemical operation. However, ONGC faces certain challenges regarding the perchem developments. The company faces challenges with OPaL, which is a joint venture between ONGC and GAIL, as it has built debt totaling 35,000 crore on a relatively small equity base and ONGC needs to make OPaL an ONGC subsidiary. Furthermore, decrease in the supply of low-cost domestic natural gas, a feedstock, as the government shifted supply to other sectors of the economy, presents another recent difficulty for ONGC’s petchem operation.