Mukesh Ambani and Donald Trump
Asia’s richest Mukesh Ambani is again in discussion. This time the reason is a large import of ethane gas from America, which was earlier sent to China, but now India is coming to India. Due to the trade war of US President Donald Trump, there has been a big change in the world, which has given India a good chance. Ambani’s company Reliance is preparing to remove this gas in the dowry of Gujarat. This gas will be useful in making plastic making, ethylene, making. With this, India will be able to become a global hub of plastic.
Ambani’s bet in ethane game
Mukesh Ambani had bet on American Ethane almost a decade ago. His company Reliance started the Ethane Cracker Unit in Dowry, Gujarat in 2017, which was the first major initiative in its kind world. At that time Reliance claimed that it is the first company to import ethane from North America. Today this foresight can prove to be a big weapon in business agreements for India. India can say in the ongoing conversation over a $ 43 billion trade deficit between India and the US, “We are buying your gas, so leave the tariff.” On July 9, the US 26% tariff deadline is going to end, and India is ready to take full advantage of this opportunity.
This step of Reliance is not limited to business only. Ethane, which is a part of natural gas, plays an important role in making plastic. It is a colorless, odorless gas, which is brought in liquid or liquid form in particular vessels. Currently one such ship, STL Qianjiang, is moving from Gulf Coast in America towards dowry. Reliance has six such ships and the company is now planning to add three more ships.
Why is ithane special?
Reliance and other refineries used to use nephtha to make plastic, which is made of crude oil. But only 30% of ethylene can be made from Nephtha, while Ethane reaches 80%. That is, ethane is more economical and effective. In terms of energy, ethane is almost half cheaper than Napha. Earlier, Ethen did not get that much priority in India. Even in natural gas coming from Qatar, ethane was not separated. But now the situation is changing. Qatar Energy has clearly stated in the new agreement with India’s Oil and Natural Gas Corporation (ONGC) that it will only give “lean” gas. If ethane is required, it will have to be paid separately for this.
ONGC has also taken steps in this direction and has made a deal for two big ethane carriers with Mitsui OSK lines of Japan. But in this whole game, Reliance has already won. The company is now planning to lay a pipeline of about 100 km long to its second unit in Gujarat with dowry.
Impact on India’s oil economy
Increasing use of ethane can lead to a big change in India’s oil -based economy. Currently, the refineries of India are mainly dependent on crude oil coming from the Middle East. But if the use of ethane increases, some refineries can go into losses. Nephatha, who previously played an important role in making polyester, detergent, fertilizer and cosmetics, can now retreat.
The oil industry in India has now reached a new era. Last year, about one -third of cars of the country’s largest car manufacturer were running on CNG. To reduce pollution and reduce dependence on foreign oil, the government has made a rule to add 20% bio-ethanol in petrol. Also, increasing demand for electric vehicles is also decreasing the consumption of petrol. Despite this, a government company in Andhra Pradesh is building a new 9 million tonne refinery annually. Experts believe that this project is only going on in the greed of subsidy and employment, because its investment does not matter much financially.
Trump and Ambani’s friendship
This step of Mukesh Ambani can prove beneficial not only for India but also for America. Due to Trump’s trade war, questions have been raised on the demand of American ethane. China was a big buyer of this gas, but now India can replace it. Even though India cannot buy as much as Chinese, it can help in reducing the oversply in the US market. It will be a chance for Trump to praise his trade policy and say that they are making America great again.