Reliance Industries on Wednesday said it has entered into agreements to long haul US-produced ethane to feed its cracker at the Jamnagar refining and petrochemical complex in Gujarat.
The cracker will be commissioned in the second half of 2016, the company said in a statement. It will nearly double its ethylene production capacity to 3.3 million tonne a year.
Reliance Industries is implementing a project to source 1.5 million tonne per annum of ethane from US to feed its crackers.
It said with the growth of shale gas industry in North America in last five years, ethane has become the dominant feedstock for crackers replacing liquids.
"Reliance's investments in shale gas and its existing crackers portfolio in India are a natural fit for sourcing Ethane from North America and shipping it to India to attain long term feedstock competitiveness," the statement said.
It "has now executed storage and capacity agreements for liquefaction and export of ethane with a North American Terminal, which is expected to commence operations in the second half of 2016," the statement said.
The company has ordered six very large ethane carriers from South Korea's Samsung Heavy Industries for $723 million.
The vessels of 87,000 cubic meters each, will be the world's first very large carriers of ethane.
Recently, US NGL exporter Enterprise Products Partners said it was building a 240,000 barrels per day ethane export terminal at Morgan's Point on the Houston Ship Channel, targeting the third quarter of 2016 for startup.
The ethane export facility is touted as the world's biggest.
It was not immediately known if Reliance Industries has entered into any contract to purchase ethane from Enterprise.
"For the purpose of transporting liquefied ethane to India in a safe and cost efficient manner, Reliance has ordered six state-of-the-art very large ethane carriers (VLECs) which will be the largest vessels ever built in the world. The ships are expected to be delivered starting last quarter of 2016 in synchronisation with the readiness of terminal in North America," the statement said.
Reliance Industries is also building a world-scale receiving and storage facility in India for liquefied ethane and pipeline to deliver ethane to its crackers.
It will upgrade its crackers to maximise cracking of ethane, have maximum operational flexibility and capability to optimise feed stocks with complete control of supply chain.
"The project will significantly improve the long term competitiveness of our cracker portfolio through dedicated feedstock, enhanced margins, higher capacity and end-to-end integration," the statement added.