Mumbai: India’s leading petrochemical producer and refiner, Reliance Industries Ltd, or RIL, will commission its new refinery ahead of schedule and start pumping natural gas from Krishna-Godavari Basin fields in three-six months, chairman Mukesh Ambani told shareholders here on Thursday.
RIL’s unit Reliance Petroleum Ltd, 5% owned by Chevron Corp., is building the 580,000 barrels per day, or bpd, refinery in Jamnagar, Gujarat.
Ambani had said last week supplies from the new refinery would represent almost half of the estimated global oil demand growth in 2009, and should increase production capacity of both petrol and diesel by around 1%.
Reliance Industries chairman and managing director Mukesh Ambani along with wife Nita at the annual general meeting of the company in Mumbai on Thursday (Photo by: Santosh Hirlekar / PTI)
Together with RIL’s adjacent 660,000 bpd refinery, the new unit will make the Jamnagar complex the world’s biggest, with a capacity of 1.2 million bpd. The company also plans to expand its polyester business, including by acquisitions, its chairman said.
Ambani, ranked by Forbes Magazine as the world’s fifth-richest man, told a shareholders’ meeting that Reliance’s polyester capacity rose by a quarter to 2.5 million tonnes (mt) a year after it bought the assets of Malaysian polyester maker Hualon Corp. last year.
“Reliance envisages consolidating further its global leadership in polyester by pursuing greenfield investment and acquisitions in the entire value chain,” Ambani said.
Reliance would also commission annual capacity of 0.9 mt of polypropylene at Jamnagar later this year, making it the third-largest polypropylene maker in the world, he said.
RIL has made a total of 41 oil and gas discoveries to date, he told shareholders. The company has previously said it has made 18 oil and gas discoveries in the D6 block in the Krishna-Godavari Basin, including an oil find with an estimated peak production of 40,000 barrels per day.
It is spending about $9 billion on development and production from the Dhirubhai 1 and 3 fields, named after Ambani’s late father, and is set to pump up to 80 million cu.m of gas per day later this year.
It will also start selling the natural gas at the equivalent of a fifth of global prices, easing the nation’s import bill at a time of record crude oil costs.
Reliance will sell gas at $25.20 (around Rs1,079) a barrel of oil equivalent (boe), a boe is the amount of energy contained in a barrel of crude oil, compared with more than $135 in global markets, Ambani said. Piping the fuel from the Krishna Godavari basin off India’s eastern coast will cut Rs1.14 trillion from the country’s import bill, he said. “We were short of deepwater equipment,” Ambani said. The company will add six more rigs in the second half of the calendar year, he said.
Rig use in the Asia-Pacific region by explorers such as Chevron, Total SA and Reliance rose to a 16-year high in May on increased oil and gas demand, a report said. India, the biggest user of rigs in the region, deployed 81 rigs to drill on land and water, oilfield services firm Baker Hughes Inc. said on its Website.
RIl would also press ahead with plans to open more Western-style supermarkets despite strong opposition from small traders who fear loss of income.
Organised retail or chain stores account for only around 4% of India’s $350-billion retail industry, making it an alluring prospect for big domestic and foreign corporations.
“We have addressed the challenges which we faced last year in its roll-out,” Ambani told shareholders at the company’s annual general meeting. “Our retail business will directly generate over half a million jobs in the next five years,” he added, reiterating earlier promises.
Reliance shares rose Rs15.9, or 0.7%, to close at Rs2,277.3 a share in Mumbai.
AFP and Archana Chaudhary of Bloomberg contributed to this story.