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India.com
4 days ago
- Business
- India.com
As Trump continues his trade war, Mukesh Ambani takes big decision on..., India's richest man set to...
As Trump continues his trade war, Mukesh Ambani takes big decision on..., India's richest man set to... Mukesh Ambani has planned to make India a global hub of plastic by betting on ethane gas imports from US. This will bring a big change in India's oil economy and trade relations. Amid US trade war, India can replace China and reduce oversupply in the American market, which will benefit both countries. Asia's richest man Mukesh Ambani is in the news again. This time the reason is the large import of ethane gas from US, which was earlier sent to China, but is now 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 opportunity. Ambani's company Reliance is preparing to unload this gas in Dahej, Gujarat. This gas will be used to make ethylene, a plastic making material. This will make India a global hub of plastic. What's Ambani's bet in the ethane game? Mukesh Ambani had bet on US ethane about a decade ago. His company Reliance started an ethane cracker unit in Dahej, Gujarat in 2017, which was the world's first major initiative of its kind. At that time, Reliance claimed that it was the first company to import ethane from North US. Today this foresight can prove to be a big weapon for India in trade agreements. In the ongoing talks between India and the US on the $43 billion trade deficit, India can say, 'We are buying your gas, so forget about the tariff.' US' 26% tariff deadline is going to expire on July 9, and India is ready to take full advantage of this opportunity. This move of Reliance is not limited to trade 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 form in special ships. Currently, one such ship, STL Qianjiang, is moving from the Gulf Coast of US to Dahej. Reliance has six such ships and the company is now planning to add three more ships. Why is ethane special? Earlier, Reliance and other refineries used naphtha, which is made from crude oil, to make plastic. But only 30% ethylene can be made from naphtha, whereas this figure reaches 80% from ethane. That is, ethane is more economical and effective. In terms of energy, ethane is almost half cheaper than naphtha. Earlier, ethane did not get that much priority in India. Even in the 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 give only 'lean' gas. If ethane is required, then it will have to be paid for separately. ONGC has also taken steps in this direction and has signed a deal with Japan's Mitsui OSK Lines for two large ethane carriers. But Reliance has already won the game. The company is now planning to lay a 100 km long pipeline from Dahej to its second unit in Gujarat. What's impact on India's oil economy? The increasing use of ethane can bring a big change in India's oil-based economy. Currently, India's refineries are mainly dependent on crude oil coming from the Middle East. But if the use of ethane increases, some refineries may go into losses. Naphtha, which earlier played an important role in making polyester, detergents, fertilizers and cosmetics, may now take a back seat. The oil industry in India has now entered a new phase. Last year, about one-third of the 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 to petrol. Also, the increasing demand for electric vehicles is also reducing petrol consumption. Despite this, a government company is building a new refinery of 9 million tonnes per annum in Andhra Pradesh. Experts believe that this project is running only for the greed of subsidy and employment, because its investment does not make much economic sense. How is Trump-Ambani's friendship? This move of Mukesh Ambani can prove to be beneficial not only for India but also for US. Due to Trump's trade war, questions have been raised on the demand for American ethane. China was a big buyer of this gas, but now India can take its place. Even if India cannot buy as much ethane as China, it can definitely help in reducing the oversupply in the US market. This will be an opportunity for Trump to praise his trade policy and say that he is making US great again.
Business Times
5 days ago
- Business
- Business Times
Asia's richest tycoon is Making America Great Again
FROM Ottawa to Beijing, US President Donald Trump's trade war has made many enemies. But it has also won America some allies. Asia's richest tycoon is preparing to welcome US cargo originally meant for China but rerouted to India. The ship Mukesh Ambani is waiting for is laden with ethane. This colorless, odorless component of natural gas is shipped in liquefied form in special carriers such as STL Qianjiang, which is currently on its way from the US Gulf Coast to billionaire Ambani's terminal in Dahej, Gujarat, on India's western seaboard. There, his flagship Reliance Industries has an ethane cracker to produce ethylene, a key building block of plastic products. The unit, completed in 2017, made Reliance 'the first company to globally conceptualise large-scale imports of ethane from North America as feedstock', it boasted in a press release back then. Eight years later, that foresight may come in handy to trade negotiators in New Delhi. 'Stop obsessing over your US$43 billion trade deficit with us,' they might like to tell their counterparts in Washington, as both sides try to close a deal ahead of the Jul 9 US deadline for 26 per cent reciprocal tariffs. 'We're going to buy your gas.' The 68-year-old petrochemicals czar bet on North American ethane more than a decade ago. His father Dhirubhai Ambani, the founder of the empire, was the original 'Polyester Prince'. And although the son has ventured into new areas and added US$57 billon in retail and digital services, the annual revenue from the legacy oils-to-chemicals business is still bigger at US$74 billion. Historically, Reliance and other refiners have cracked naphtha – obtained by distilling crude oil – to make ethylene. The conversion efficiency is low at around 30 per cent, compared with 80 per cent for ethane. But since crude oil had to be imported anyway to produce motor spirits, it made sense to use it for making polyester and other polymers as well. Ethane, which on an energy-equivalent basis is half as expensive as naphtha, hasn't been popular until now. In fact, Qatar didn't even bother to separate it from the natural gas it supplied to India. But even that is changing. Under a new agreement with India's Oil & Natural Gas Corporation (ONGC), QatarEnergy will only provide 'lean' gas. If the buyer wants ethane, it will have to pay for it. ONGC recently entered into a deal with Mitsui OSK Lines, which will build, own and operate two very large carriers for the state-owned firm to import ethane. Here, too, Ambani wrote the template. Reliance co-owns a fleet of six such vessels. It now wants to lay a 100-kilometre pipeline to bring ethane from the terminal to another of its processing units in Gujarat. New capacities for ethane cracking are coming up, too, including by Gail India, a public-sector firm like ONGC. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up On extra time It isn't clear if this entanglement with North American feedstock will expand indefinitely. Just how much more ethane could Reliance and others handle? After all, it's still an oil-centric economy they serve. But if the dependence grows, it could profoundly alter India's fuel economics. For one thing, Indian state-owned refiners may become unprofitable dumping grounds for Middle Eastern crude. Any residual use for the naphtha they churn out alongside transport fuels won't compensate for the loss of its central role in making everything from polyester and detergents to fertilisers, cosmetics and pharmaceuticals. Oil is on extra time in India. A third of the vehicles sold last year by the nation's largest carmaker run on compressed natural gas. To manage pollution, and reduce dependence on imported fossil fuels, New Delhi has mandated the addition of 20 per cent bio-ethanol in gasoline. Mass adoption of electric vehicles will further cut into gasoline demand. Even then, a government-controlled firm is setting up a 9-million-ton-a-year crude refinery in the southern state of Andhra Pradesh. I suspect the reason the project is going ahead is because the state, eager to attract capital and create jobs, is offering lavish subsidies. Otherwise, the investment case is weak. Meanwhile, Ambani plans to add three more ethane carriers to its fleet. Now that Trump has fallen out with Elon Musk, the White House may have room for a new centibillionaire guest. Both parties may gain from a closer friendship. While the trade war with China is on pause, the fate of US ethane still hangs in limbo. Although India can't match the much larger Chinese appetite for cracking ethane, it can certainly absorb some of the oversupply. Trump will get to brag about how his trade policies are making America great again – and his sons may get some tips on how to run their telecom startup. Ambani will fight off the pressure on his margins by shifting to a cheaper feedstock. The tycoon runs India's biggest telecommunications and retail networks, but it's only now that his family has started climbing up on the list of global celebrities. First came the glitzy, five-month-long, US$600 million dollar wedding celebration last year of the youngest of the three Ambani children, the heir apparent of Reliance's energy business. Ivanka Trump and Jared Kushner were among the attendees. Then Trump met Ambani and his wife, Nita, at his pre-inauguration party. This fall, Nita Ambani will take over New York's Lincoln Center for a 'Slice of India' weekend. Making a mark as a big buyer of American ethane may not draw the attention of Vanity Fair. But the White House will surely take note. BLOOMBERG
Mint
5 days ago
- Business
- Mint
Andy Mukherjee: Why imports of American gas by Reliance make all-round strategic sense
From Ottawa to Beijing, US President Donald Trump's trade war has made many enemies. But it has also won America some allies. Asia's richest tycoon is preparing to welcome US cargo originally meant for China but re-routed to India. The ship that Mukesh Ambani of Reliance Industries Ltd is waiting for is laden with ethane. This colourless, odourless component of natural gas is shipped in liquefied form in special carriers such as STL Qianjiang, which is on its way from the US Gulf Coast to Reliance's terminal in Dahej, Gujarat, where the company has an ethane cracker to produce ethylene, used for plastic products. Also Read: Ethanol: An eco-friendly fuel or another green mirage? The unit, completed in 2017, made Reliance 'the first company to globally conceptualize large-scale imports of ethane from North America as feedstock," it said in a press release back then. Eight years later, that foresight may come in handy to India's trade negotiators. 'Stop obsessing over your $43 billion trade deficit with us," they might like to tell their counterparts in Washington, as both sides try to close a trade deal ahead. 'We're going to buy your gas." Ambani bet on North American ethane more than a decade ago. His father Dhirubhai Ambani, the empire's founder, was the original 'Polyester Prince." And although the son has ventured into new areas and added $57 billon in retail and digital services, the annual revenue from the legacy oils-to-chemicals business is still bigger at $74 billion. Historically, Reliance and other refiners have cracked naphtha—obtained by distilling crude oil—to make ethylene. The conversion efficiency is low at around 30%, compared with 80% for ethane. But since crude oil had to be imported anyway to produce motor spirits, it made sense to use it for making polyester and other polymers. Also Read: Energy security: India needn't be staring at a $1 trillion import bill Ethane, which on an energy-equivalent basis is half as expensive as naphtha, hasn't been popular until now. In fact, Qatar didn't even bother to separate it from the natural gas it supplied to India. But even that is changing. Under a new agreement with India's Oil & Natural Gas Corp (ONGC), QatarEnergy will only provide 'lean' gas. If the buyer wants ethane, it will have to pay for it. ONGC recently entered into a deal with Mitsui OSK, which will build, own and operate two large carriers for the state-owned firm to import ethane. Here, too, Ambani wrote the template. Reliance co-owns a fleet of six such vessels. It now wants to lay a 100-km pipeline to bring ethane from the terminal to another of its processing units in Gujarat. New capacities for ethane cracking are coming up, too, including by GAIL. It isn't clear if imports of American feedstock will expand indefinitely. Just how much more ethane could Reliance and others handle? After all, it's still an oil-centric economy they serve. But if the dependence grows, it could alter India's fuel economics. For one, state-owned refiners may become unprofitable dumping grounds for West Asian crude. Any residual use for the naphtha they churn out alongside transport fuels won't compensate for the loss of its central role in making everything from polyester and detergents to fertilizers, cosmetics and pharmaceuticals. Oil is on extra time in India. A third of the vehicles sold last year by its largest carmaker run on compressed natural gas. To manage pollution, and reduce dependence on imported fossil fuels, New Delhi has mandated the addition of 20% bio-ethanol in gasoline. Mass EV adoption will further reduce petrol demand. Even so, a government-controlled firm is setting up a 9-million-tonne-a-year crude refinery in Andhra Pradesh. I suspect that this project is going ahead because the state, eager to attract capital and create jobs, is offering lavish subsidies. Otherwise, the investment case is weak. Also Read: Sumant Sinha: Nuclear energy is a crucial piece in the puzzle of climate action Reliance plans to add three more ethane carriers to its fleet. Both the US and India may gain from a closer friendship. While the trade war with China is on pause, the fate of US ethane still hangs in limbo. Although India can't match the much larger Chinese appetite for cracking ethane, it can absorb some of the oversupply. The White House would get to brag about how its trade policies are making America great again. Ambani will manage to fight off pressure on his margins by shifting to a cheaper feedstock. Ivanka Trump and Jared Kushner were among the attendees at wedding celebration last year of the youngest of Mukesh Ambani and his wife Nita's three children. Then Trump met Ambani and Nita at his pre-inauguration party. This fall, Nita Ambani will take over New York's Lincoln Center for a 'Slice of India' weekend. Making a mark as a big buyer of American ethane may not draw the attention of Vanity Fair. But the White House will surely take note. ©Bloomberg The author is a Bloomberg Opinion columnist covering industrial companies and financial services in Asia.
Time of India
5 days ago
- Business
- Time of India
Mukesh Ambani, Asia's richest tycoon, is making America great again
From Ottawa to Beijing, US President Donald Trump 's trade war has made many enemies. But it has also won America some allies. Asia's richest tycoon is preparing to welcome US cargo originally meant for China but rerouted to India. The ship Mukesh Ambani is waiting for is laden with ethane . This colorless, odorless component of natural gas is shipped in liquefied form in special carriers such as STL Qianjiang, which is currently on its way from the US Gulf Coast to billionaire Ambani's terminal in Dahej, Gujarat, on India's western seaboard. There, his flagship Reliance Industries Ltd. has an ethane cracker to produce ethylene, a key building block of plastic products. The unit, completed in 2017, made Reliance 'the first company to globally conceptualize large-scale imports of ethane from North America as feedstock,' it boasted in a press release back then. Eight years later, that foresight may come in handy to trade negotiators in New Delhi. 'Stop obsessing over your $43 billion trade deficit with us,' they might like to tell their counterparts in Washington, as both sides try to close a deal ahead of the July 9 US deadline for 26% reciprocal tariffs. 'We're going to buy your gas.' The 68-year-old petrochemicals czar bet on North American ethane more than a decade ago. His father Dhirubhai Ambani, the founder of the empire, was the original 'Polyester Prince.' And although the son has ventured into new areas and added $57 billon in retail and digital services, the annual revenue from the legacy oils-to-chemicals business is still bigger at $74 billion. Historically, Reliance and other refiners have cracked naphtha — obtained by distilling crude oil — to make ethylene. The conversion efficiency is low at around 30%, compared with 80% for ethane. But since crude oil had to be imported anyway to produce motor spirits, it made sense to use it for making polyester and other polymers as well. Ethane, which on an energy-equivalent basis is half as expensive as naphtha, hasn't been popular until now. In fact, Qatar didn't even bother to separate it from the natural gas it supplied to India. But even that is changing. Under a new agreement with India's Oil & Natural Gas Corp., QatarEnergy will only provide 'lean' gas. If the buyer wants ethane, it will have to pay for it. ONGC recently entered into a deal with Mitsui OSK Lines Ltd., which will build, own and operate two very large carriers for the state-owned firm to import ethane. Here, too, Ambani wrote the template. Reliance co-owns a fleet of six such vessels. It now wants to lay a 100-kilometer (62-mile) pipeline to bring ethane from the terminal to another of its processing units in Gujarat. New capacities for ethane cracking are coming up, too, including by GAIL India Ltd ., a public-sector firm like ONGC. It isn't clear if this entanglement with North American feedstock will expand indefinitely. Just how much more ethane could Reliance and others handle? After all, it's still an oil-centric economy they serve. But if the dependence grows, it could profoundly alter India's fuel economics. For one thing, Indian state-owned refiners may become unprofitable dumping grounds for Middle Eastern crude. Any residual use for the naphtha they churn out alongside transport fuels won't compensate for the loss of its central role in making everything from polyester and detergents to fertilizers, cosmetics and pharmaceuticals. Oil is on extra time in India. A third of the vehicles sold last year by the nation's largest carmaker run on compressed natural gas. To manage pollution, and reduce dependence on imported fossil fuels, New Delhi has mandated the addition of 20% bio-ethanol in gasoline. Mass adoption of electric vehicles will further cut into gasoline demand. Even then, a government-controlled firm is setting up a 9-million-ton-a-year crude refinery in the southern state of Andhra Pradesh. I suspect the reason the project is going ahead is because the state, eager to attract capital and create jobs, is offering lavish subsidies. Otherwise, the investment case is weak. Meanwhile, Ambani plans to add three more ethane carriers to its fleet. Now that Trump has fallen out with Elon Musk, the White House may have room for a new centi-billionaire guest. Both parties may gain from a closer friendship. While the trade war with China is on pause, the fate of US ethane still hangs in limbo. Although India can't match the much larger Chinese appetite for cracking ethane, it can certainly absorb some of the oversupply. Trump will get to brag about how his trade policies are making America great again — and his sons may get some tips on how to run their telecom startup. Ambani will fight off the pressure on his margins by shifting to a cheaper feedstock. The tycoon runs India's biggest telecommunications and retail networks, but it's only now that his family has started climbing up on the list of global celebrities. First came the glitzy, five-month-long, $600-million-dollar wedding celebration last year of the youngest of the three Ambani children, the heir apparent of Reliance's energy business. Ivanka Trump and Jared Kushner were among the attendees. Then Trump met Ambani and his wife, Nita, at his pre-inauguration party. This fall, Nita Ambani will take over New York's Lincoln Center for a 'Slice of India' weekend. Making a mark as a big buyer of American ethane may not draw the attention of Vanity Fair. But the White House will surely take note.
Economic Times
6 days ago
- Business
- Economic Times
Mukesh Ambani, Asia's richest tycoon, is making America great again
From Ottawa to Beijing, US President Donald Trump's trade war has made many enemies. But it has also won America some allies. Asia's richest tycoon is preparing to welcome US cargo originally meant for China but rerouted to India. The ship Mukesh Ambani is waiting for is laden with ethane. This colorless, odorless component of natural gas is shipped in liquefied form in special carriers such as STL Qianjiang, which is currently on its way from the US Gulf Coast to billionaire Ambani's terminal in Dahej, Gujarat, on India's western seaboard. There, his flagship Reliance Industries Ltd. has an ethane cracker to produce ethylene, a key building block of plastic products. The unit, completed in 2017, made Reliance 'the first company to globally conceptualize large-scale imports of ethane from North America as feedstock,' it boasted in a press release back then. Eight years later, that foresight may come in handy to trade negotiators in New Delhi. 'Stop obsessing over your $43 billion trade deficit with us,' they might like to tell their counterparts in Washington, as both sides try to close a deal ahead of the July 9 US deadline for 26% reciprocal tariffs. 'We're going to buy your gas.' The 68-year-old petrochemicals czar bet on North American ethane more than a decade ago. His father Dhirubhai Ambani, the founder of the empire, was the original 'Polyester Prince.' And although the son has ventured into new areas and added $57 billon in retail and digital services, the annual revenue from the legacy oils-to-chemicals business is still bigger at $74 billion. Historically, Reliance and other refiners have cracked naphtha — obtained by distilling crude oil — to make ethylene. The conversion efficiency is low at around 30%, compared with 80% for ethane. But since crude oil had to be imported anyway to produce motor spirits, it made sense to use it for making polyester and other polymers as well. Ethane, which on an energy-equivalent basis is half as expensive as naphtha, hasn't been popular until now. In fact, Qatar didn't even bother to separate it from the natural gas it supplied to India. But even that is changing. Under a new agreement with India's Oil & Natural Gas Corp., QatarEnergy will only provide 'lean' gas. If the buyer wants ethane, it will have to pay for it. ONGC recently entered into a deal with Mitsui OSK Lines Ltd., which will build, own and operate two very large carriers for the state-owned firm to import ethane. Here, too, Ambani wrote the template. Reliance co-owns a fleet of six such vessels. It now wants to lay a 100-kilometer (62-mile) pipeline to bring ethane from the terminal to another of its processing units in Gujarat. New capacities for ethane cracking are coming up, too, including by GAIL India Ltd., a public-sector firm like ONGC. It isn't clear if this entanglement with North American feedstock will expand indefinitely. Just how much more ethane could Reliance and others handle? After all, it's still an oil-centric economy they serve. But if the dependence grows, it could profoundly alter India's fuel economics. For one thing, Indian state-owned refiners may become unprofitable dumping grounds for Middle Eastern crude. Any residual use for the naphtha they churn out alongside transport fuels won't compensate for the loss of its central role in making everything from polyester and detergents to fertilizers, cosmetics and is on extra time in India. A third of the vehicles sold last year by the nation's largest carmaker run on compressed natural gas. To manage pollution, and reduce dependence on imported fossil fuels, New Delhi has mandated the addition of 20% bio-ethanol in gasoline. Mass adoption of electric vehicles will further cut into gasoline demand. Even then, a government-controlled firm is setting up a 9-million-ton-a-year crude refinery in the southern state of Andhra Pradesh. I suspect the reason the project is going ahead is because the state, eager to attract capital and create jobs, is offering lavish subsidies. Otherwise, the investment case is Ambani plans to add three more ethane carriers to its fleet. Now that Trump has fallen out with Elon Musk, the White House may have room for a new centi-billionaire guest. Both parties may gain from a closer friendship. While the trade war with China is on pause, the fate of US ethane still hangs in limbo. Although India can't match the much larger Chinese appetite for cracking ethane, it can certainly absorb some of the oversupply. Trump will get to brag about how his trade policies are making America great again — and his sons may get some tips on how to run their telecom startup. Ambani will fight off the pressure on his margins by shifting to a cheaper tycoon runs India's biggest telecommunications and retail networks, but it's only now that his family has started climbing up on the list of global celebrities. First came the glitzy, five-month-long, $600-million-dollar wedding celebration last year of the youngest of the three Ambani children, the heir apparent of Reliance's energy business. Ivanka Trump and Jared Kushner were among the attendees. Then Trump met Ambani and his wife, Nita, at his pre-inauguration party. This fall, Nita Ambani will take over New York's Lincoln Center for a 'Slice of India' weekend. Making a mark as a big buyer of American ethane may not draw the attention of Vanity Fair. But the White House will surely take note.
