All decks cleared for the oil and gas powerhouse to establish a wholly-owned subsidiary that will create massive capacities for green hydrogen and ammonia
The state-owned Oil and Natural Gas Corporation (ONGC) will set up a new unit for gas and clean energy projects, such as green hydrogen, as it looks to fast-track its foray into new areas.
In a stock exchange filing, the firm said that the Ministry of Petroleum and Natural Gas signed off on its proposal to form a wholly-owned subsidiary for gas and clean energy businesses. "The proposed name of the company is 'ONGC Green Limited', subject to the approval of the Ministry of Corporate Affairs, Government of India," it said. The ONGC board, too, has approved the formation of the subsidiary.
The oil and gas behemoth plans to spend Rs 1 lakh crore on installing 10 GW of renewable energy capacity and building a per-annum capacity of two million tonnes of green ammonia by 2035 as part of its decarbonisation strategy.
In February 2021, ONGC proposed a separate unit for importing LNG and trading in gas to address an anomaly: Despite being India's largest gas producer, ONGC does not trade in the fuel It sells most of the gas it produces from fields in Mumbai offshore and at sites identified by the government, which also sets the price. This natural gas fuels electricity generation and fertiliser factories. In its CNG form, it fuels automobiles.
In the filing, the company also stated that its board has accorded in-principle approval for the formation of a joint venture company either directly or through an affiliate with NTPC Green Energy Ltd (a wholly-owned subsidiary of NTPC Ltd).
"The said joint venture company shall be engaged in the business of offshore wind energy and other renewable energy," ONGC said.
ONGC inked an agreement with NTPC Green Energy Limited for the development of renewable energy projects last September. The agreement greenlights collaborations on offshore wind projects and exploration of opportunities in storage, e-mobility, carbon credits and green credits, nuclear, green hydrogen business, and its derivatives (green ammonia and green methanol).
ONGC has a renewable portfolio of 176 MW, comprising 153 MW of wind power and 23 MW of solar. It is aiming to add 10 gigawatts of renewable power to its portfolio by 2040.