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RIL expects twin gains from oil demand comeback and low-carbon initiatives

August 12/2021

MOSCOW (MRC) -- Indian refining giant Reliance Industries (RIL) posted robust crude throughput growth in April-June as oil products demand witnessed healthy year-on-year growth, the company said, adding that it had started investing on its clean energy initiatives keeping in mind its vision to achieve net carbon zero by 2035, reported S&P Global.

While the company has also raised its gas production, a revival in demand for packaging and hygiene products was helping demand for petrochemical products to also bounce back, it added.

"In our oils-to-chemicals business, we generated strong earnings through our integrated portfolio and superior product placement capabilities," said Mukesh Ambani, chairman and managing director of Reliance Industries.

The biggest private refiner recorded a 6.74% year-on-year rise in crude throughput in its April-June fiscal first quarter to 19 million mt at its Jamnagar refineries complex, it said.

The higher processing level reflected a healthy operational performance of its refining segment during the challenging time of the second wave of coronavirus pandemic in India, the company said, adding that Reliance processed 17.8 million mt of crude in the year-ago period.

Reliance operates one of the world's biggest oil refinery complexes in the western state of Gujarat. At its Jamnagar complex, Reliance has an older 660,000 b/d domestic-focused refinery and a 704,000 b/d export-oriented refinery.

Reliance said India's domestic oil products demand in April-June was lower on a quarter-on-quarter basis because of the resurgence of the second COVID-19 wave. But demand was up 18.8% year on year.

Gasoline, diesel and jet demand increased by 35.1%, 22.5% and 142.6%, respectively over the year-ago quarter. Indian domestic air travel has been increasing in most regions, while the international travel into and out of India is still muted, Reliance said.

Commenting on the global outlook, Reliance said oil demand during April-June recovered to 94.7 million b/d, up 1.2 million b/d from the previous quarter, while it was 11.8 million b/d higher compared to the same quarter in 2020.

While new COVID outbreaks saw global oil demand fall in April and May this year by y 510,000 b/d and 880,000 b/d month-on-month respectively, a sharp uptick in demand by 3.2 million b/d in June contributed to robust demand growth in the quarter.

"Oil supplies remained tight due to the strong compliance to production targets by OPEC plus countries. Stronger oil fundamentals, vaccination programs and better demand outlook have resulted in a steady rise in crude prices throughout Q1 of financial year 2021-22," Reliance said.

Reliance said domestic polymer demand in its fiscal Q1 grew by 28% year on year on a lower base in the year-ago quarter due to lockdown with sustained demand from essential sectors like food and FMCG packaging, e-commerce packaging, health and the hygiene segment.

Domestic polyester demand improved by 203% in fiscal Q1 year on year over the pandemic-hit Q1 of 2020-21. Polyester filament and fiber markets witnessed high growth rates with improved domestic downstream operations supported by firm global markets, the company said.

As MRC informed before, RIL is doubling its polyethylene terephthalate (PET) recycling capacity by setting up a recycled polyester staple fiber (PSF) manufacturing facility in Andhra Pradesh. The move is part of RIL's commitment to lead the industry on circular economy, enhance its sustainability quotient and bolster the entire polyester and polymer value chain.

According to MRC's ScanPlast report, Russia's estimated PET consumption totalled 411,200 tonnes in the first six month of 2021, up by 12% year on year. Russian companies processed 62,910 tonnes in June, compared to 85,890 tonnes a month earlier.

Reliance Industries is one of the world's largest producers of polymers. Thus, the company produces among others polypropylene, polyethylene and polyvinyl chloride.
Author:Margaret Volkova
Tags:crude and gaz condensate, PET-granulate, fibers/filaments, gas processing, petrochemistry, packaging, Reliance Industries, India.
Category:General News
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