RIL likely to see big cash flow boost after adding world’s largest ROGC, petrochem portfolio expansion

Reliance Industries is likely to see a big cash-flow boost as projects of over $40 billion start to deliver in full swing this fiscal while capex falls, international brokerage house CLSA said today. In a report, CLSA said that the stabilisation of just-commissioned refinery off-gas cracker (ROGC) and petcoke gasification projects would boost EBITDA, PTI reported.

ROGC is the latest addition to the RIL’s portfolio as the world’s first ever and the largest. The ROGC complex is a core component of RIL’s most innovative and world-scale J3 project at its integrated Refinery-Petrochemicals complex at Jamnagar.

With the commissioning of ROGC complex, the largest ever expansion of RIL’s petrochemicals portfolio comes to a flawless completion. Jamnagar already has a capacity to process 60 million tonne of crude oil a year, making it the biggest refining complex in the world. The shares of RIL closed at Rs 911.50 at NSE up by 0.19 percent on Tuesday.

About the innovative design

This is one of the largest capital expenditure programme globally in the sector in recent times. The ROGC complex has a unique configuration as it uses off-gases from RIL’s two refineries at Jamnagar as feedstock. This innovative approach of integration with refineries provides a sustainable cost advantage, making ROGC competitive with respect to the crackers in Middle-East and North America which have feedstock cost advantage. ROGC is the latest addition to RIL’s existing cracker portfolio, consisting of cracker facilities at Nagothane in Maharashtra and Hazira, Dahej and Vadodara in Gujarat.

Competitive and flexible cracker portfolio

There are nearly 270 Ethylene plants globally with a combined capacity of over 170 MMTPA. RIL’s combined ethylene capacity is now close to 4 MMTPA at five of its manufacturing sites. With ROGC and imported Ethane, RIL has one of the most competitive and flexible cracker portfolio. In 2017, RIL had commissioned a new Para-xylene (PX) plant at Jamnagar, with an aim to more than double the company’s PX capacity from 2.0 MMTPA to 4.2 MMTPA. The plant, with a capacity of 2.2 MMTPA, added value to the output from refineries and improve profitability of the Jamnagar complex.

Reliance Industries Limited (RIL)