Mumbai: Reliance Industries Ltd is looking at selling petrol and diesel from its twin refineries at Jamnagar in Gujarat directly to the United States of America, the world’s largest fuel consumer.
“We are in discussions with certain parties in US,” said P M S Prasad, head of the company’s oil and gas business. “We believe the highest value addition to every molecule is through direct sales and yes we are keen on doing that in US.”
RIL is talking to consumers of gasoline (petrol) as well as US fuel marketers who currently have a deficit, he said but did not give details.
The company recently started gasoline trading operations in the US. Its office located in Houston would trade in gasoline both on the US Gulf Coast and New York Harbor market.
Prasad said RIL was in talks with marketers such as Hess who currently have a product deficit.
RIL this month took 1.3 million barrels of clean product storage in the New York Harbor area, the first time ever an Indian firm has taken storage in the US to store and trade petroleum products.
It recently commissioned its clean storage facility at the Ashkelon terminal in Israel to tap Mediterranean and European markets. It has also leased clean oil products storages in Singapore and the Caribbean.
Prasad, however, did not say what volumes was Reliance expecting to sell in the US.
Reliance Industries was previously looking at sales in the US in association with Chevron Corp, which had a 5% stake in Reliance Petroleum, the unit that recently commissioned the second refinery at Jamnagar.
Chevron, which had an option to raise its stake in the refinery to 29%, wanted to market gasoline and diesel exclusively in the US and Europe, but Reliance Industries insisted that it wants to sell fuel in these markets on its own.
Subsequently, Chevron exited RPL and now Reliance Industries is looking at direct sales in the US.
Currently, RIL exports most of the fuel from its 6,60,000 barrel a day Jamnagar-1 (or J-1) refinery to traders, who in turn resell the fuel to different markets in the US, Europe, the Middle East and Latin America. About 4-5 million tonnes of petrol and a small quantity of jet fuel find its way to the US.
Its 5,80,000 barrel a day Jamnagar-2 (or J-2) refinery, which commenced operations in late December, will start producing gasoline by next month.
J-1 had in 2007 been converted into an export-oriented unit while J-2 is in an SEZ that is meant to ship out all its products.
All units of J-2 are likely to be commissioned by next month and full-scale operations would start in 3-4 months.
Prasad said the departure of trading head Michael Ng and his team from RIL’s trading office in Singapore had not impacted its plans.
“We have not closed down the trading office because Michael Ng has left. We are staffing it again,” he said without elaborating.
Besides Singapore, the company has trading offices in Mumbai, Dubai and London.