Oil and Natural Gas Corp Ltd (ONGC) is looking at setting up two oil-to-chemical plants in India to convert crude oil directly into high-value chemical products, as the company prepares for its energy transition, said Arun Kumar Singh, Chairman, ONGC, Economic Times reported.
Crude oil is a liquid petroleum product formed from the remains of animals and plants covered by layers of sand, silt, and rock, subject to heat and pressure, and eventually turned into a type of fossil fuel that is refined into usable products, including gasoline, diesel, liquefied petroleum gases, and feedstock for the petrochemical industry.
Companies like ONGC pump the resource out from below the layers of the earth’s surface and underground reservoirs to trade in the global markets. This resource is also called as the black gold, which is the primary source of energy production.
Petrochemical, a by-product derived from crude oil is used to make perfume, soap, capsules, fibres and other man-made plastics. Singh mentioned in the annual report that, the demand for petrochemicals is expected to remain strong and this will continue to be a key driver for oil and gas demand in the future, based on the report by the Economic Times.
India’s ONGC, the oil and gas producer also entered into a term contract with Bharat Petroleum Corp Ltd (BPCL) for sale of crude oil from the Mumbai region. This move cements a strong partnership between the two companies, said ONGC a week ago. The contract with BPCL comes after the Indian government decided to grant marketing and pricing freedom for domestic crude oil, replacing the previous allocation mechanism.
ONGC is said to collaborate with other entities to explore opportunities in the oil to chemical (O2C), refining, and petrochemicals. The company also plans to set up two greenfield O2C plants in India. It is further partnering with players to explore opportunities in the Oil to Chemical (O2C) and Oil to Petrochemicals (O2P) sector, said Singh to Economic Times.
