ONGC's Energy Shift: Oil-to-Chemical Plants
Oil and Natural Gas Corporation Ltd
As the world faces unprecedented challenges posed by climate change, India's oil and gas producer, ONGC, is gearing up for a significant energy transition.
In line with this vision, the company plans to establish two oil-to-chemical plants within the country. This strategic move aims to convert crude oil directly into high-value chemical products, paving the way for a sustainable future amid the global shift away from fossil fuels.
Unlocking the Potential of Oil-to-Chemical Technology
Traditionally, crude oil has been processed in refineries to produce conventional transportation fuels like petrol, diesel, and jet fuel.
However, with the industry's focus shifting towards greener alternatives, ONGC is exploring new avenues for utilising crude oil. Petrochemicals, derived from crude oil, serve as essential building blocks for manufacturing products such as detergents, fibres, polythene, and man-made plastics.
ONGC's Strategic Approach
ONGC's Chairman, Arun Kumar Singh, emphasised the robust demand for petrochemicals, projecting it as a critical driver for future oil and gas demand.
The company's collaborative efforts with other entities are aimed at exploring opportunities in the oil-to-chemical (O2C), refining, and petrochemical sectors.
The firm already operates two subsidiaries, Mangalore Refinery and Petrochemicals Limited and ONGC Petro-Additions Limited, which run petrochemical units in Karnataka and Gujarat, respectively. ONGC aims to substantially expand its chemical and petrochemical portfolio, with a target of reaching 8 million tonnes per year by 2030.
Challenges and Global Trends
The International Energy Agency (IEA) estimates that global oil demand will plateau by 2030, driven by the rise of electric vehicles and alternative drive technologies.
As a result, the energy industry worldwide is seeking alternatives. Crude oil-to-chemicals (COTC) technology offers a direct conversion of crude oil into high-value chemicals, a departure from traditional transportation fuels.
This approach allows the production of chemical feedstock exceeding 70–80% of the barrel in integrated refinery complexes, compared to only about 10% in non-integrated facilities.
Taking Cues from Global Players
China and the Middle East lead in COTC plants, with Saudi Aramco and SABIC planning a massive plant processing Arabian Light crude oil to produce approximately 9 million tonnes of chemicals annually.
The IEA predicts that petrochemicals will drive over one-third of global oil consumption growth by 2030, making it a significant segment for ONGC to capitalise on.
ONGC's Commitment to Net Zero Emissions
To tackle the climate challenge, ONGC is investing ₹1 lakh crore by 2030 in energy transition projects, aiming for net zero carbon emissions by 2038. The firm, along with other state-owned oil and gas companies, including Indian Oil (IOC), Hindustan Petroleum (HPCL), GAIL, and Bharat Petroleum (BPCL), is preparing roadmaps for achieving net-zero emissions, emphasising sustainability, environmental, social, and governance (ESG) aspects.
Scaling Up Renewable Portfolio
In addition to the O2C projects, ONGC plans to scale up its renewable portfolio to 10 GW by 2030, with projects already in the works in Rajasthan and a focus on offshore wind farms.
The company is actively exploring collaborations in the low-carbon energy sector, including renewables, green hydrogen, green ammonia, and other derivatives of green hydrogen.
Looking Ahead
As ONGC revives its oil and gas production with new projects on both the east and west coasts, the company strives to remain resilient, agile, and adaptable in a rapidly changing energy landscape.
Cleaner fuels like natural gas will continue to play a pivotal role in balancing variable renewable energy while reducing carbon emissions in the short term.
ONGC's forward-thinking initiatives and commitment to sustainable practices underscore its dedication to embracing the energy transition and shaping a greener future for India and beyond.
To view and compare company ESG Ratings and Sustainability Reports across sectors, follow our Company ESG Profiles page.
Source: PTI
