As part of its plans to enter the power generation sector, Mukesh Ambani-owned Reliance Industries Ltd (RIL) is exploring the option of using petcoke mixed with imported coal as fuel for setting up generating stations at three locations off the Gujarat coast.
Power fuel: Reliance’s Jamnagar refinery, which produces a significant quantity of petcoke. Last fiscal, the firm sold 5.34 mt of petcoke. AFP
Petcoke is a residue left after the refining of crude and has a high calorific value, and is also high in sulphur. RIL’s Jamnagar refinery produces a significant quantity of petcoke. The oil-to-yarn and retail conglomerate has been given room for investment in the sector post the scrapping of a non-compete agreement between the brothers in May. RIL is finalizing the locations and is expected to use fluidized bed boilers for petcoke.
“The plans are to get imported coal and mix it with petcoke for power generation. These projects will have coastal locations,” said a person aware of the development, but who did not want to be identified.
RIL has the world’s largest refining hub at its Jamnagar complex in Gujarat having 1.24 million barrels per day (mbpd) of crude processing capacity. According to the information available on RIL’s website, the annual demand for petcoke in India is presently about 8 million tonnes (mt), with Gujarat and Rajasthan accounting for about 75% of the domestic demand. During the last fiscal, RIL sold a total of 5.34 mt of petcoke.
RIL declined to comment. “We do not comment on speculation as a company policy,” a spokesperson said in an email.
A person familiar with the development, who did not want to be named, said, “RIL has been exploring options for the last few years for perfecting the technology. Petcoke has been one of the options. The coastal locations are in the process of being finalized.”
According to a former government official, who requested anonymity, “RIL had earlier come up with a proposal for a project at Jamnagar based on petcoke. The plan was to mix it with limestone, which is found in Gujarat, to take care of the sulphur issue.”
Gujarat has an installed power generation capacity of around 11,711MW with no load shedding. It also has a per capita consumption of 1,446 kWh, double that of the national average.
While denying that Gujarat has been approached by RIL, Saurabh Patel, state energy and petrochemicals minister, said, “When everything is finalized, they’ll come back to us.”
“They (RIL) have petcoke in huge quantum. So they would like to convert petcoke into coal. It is a good proposition... It is a win-win situation for everyone. They can’t transport petcoke from here to other states. So naturally they will have it over here if they want to go for it (petcoke-based power generation),” he added.
At RIL’s annual general meeting held in June, Ambani had described the entry into power generation, transmission and distribution as a “transformational initiative”.
“The power sector is a logical extension for us and we will bid for all the UMPPs (ultra mega power projects),” he said, referring to the government’s programme to set up projects of 4,000MW capacity. “In the next few months, we will have a concrete investment programme,” Ambani said, while responding to shareholders’ queries.
RIL posted a net profit of Rs4,851 crore for the quarter ended 30 June, up 32.3% from the same period a year ago. The company has a capital expenditure plan of $1.5-2 billion (Rs6,990-9,320 crore) in the current fiscal.
Sanjeev Agrawal, managing director of AMPLUS Infrastructure, another power project developer, said, “This is a feasible option for RIL. They had a similar plan earlier. It will be easier for RIL as petcoke is their captive fuel source with confirmed availability at a reasonable price.”