Rahul Wadke

Mumbai, Oct. 3

Reliance Industries Ltd is planning to convert petroleum coke, a low-value residual output of refining crude petroleum, into synthetic fuel such as diesel and naphtha.

Given the differential in prices between the two products, the acquisition of the relevant technology for conversion opens up a new revenue stream for the company.

Petroleum coke or petcoke is a residue produced while refining crude oil. Reliance annually produces 2.5 million tonnes of this residue.

Fuel plant

Sources familiar with the development said Reliance plans to set up a plant having a daily processing capacity of 4,000 tonnes of petcoke for producing the fuels. These sources also said that the company would soon be placing an order with Larsen & Toubro for six such units. The technology partner of Reliance for this venture is Lurgi AG of Germany, global major in coal conversion technologies.

Fertiliser Feedstock

Rashtriya Chemicals & Fertilizers Ltd reported that it is contemplating using gas from coal gasification as feedstock for its fertiliser plants. Sources in Tata Chemicals also indicated that Reliance had evinced interest in supplying synthetic gas as feedstock for its fertiliser units. However, it may be noted that the technology for converting coal into synthetic fuels has been around for last 80 years. In the post World War II period, due to major oil discoveries and cheap oil, synthetic fuels became economically unviable.

Today, with Brent crude prices prevailing in the $80 range per barrel, coal liquefaction and gasification has caught the attention of global oil companies as they see it as a cheaper alternative to crude oil.

(This article was published in the Business Line print edition dated October 4, 2007)
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