IndianOil is planning to monetise its hydrogen-producing facilities to raise about Rs 10,000 crore.
IndianOil is aiming to hive off some of its hydrogen-producing units and sulphur recovery facilities at its refineries to a separate entity and sell stakes in it to one or more private companies.
The company has proposed the idea to the government which is studying it. The plan to monetise the hydrogen-producing facilities was in response to the government’s proposal to sell stakes in oil and gas pipelines of IndianOil.
IndianOil is not too keen to sell a stake in its pipelines and has instead suggested a stake sale in its hydrogen facilities.
The Central government expects IndianOil, GAIL (India) and the Hindustan Petroleum Corporation (HPCL) to raise Rs 17,000 crore by selling stakes in their pipelines through infrastructure route in FY22. Of this, Rs 8,000 crore is targeted from IndianOil’s pipelines and the remainder equally from GAIL (India) and HPCL.
IndianOil will continue to source hydrogen from these facilities, which will have the freedom to sell the gas to third parties. Transporting hydrogen to neighbouring industrial clusters via pipeline can be another revenue generator for the facility.
Refineries usually have large facilities to produce hydrogen that they use in the processing of intermediate oil products and for removal of sulphur from refined fuels to meet emission standards. IndianOil mostly uses natural gas and naphtha to produce hydrogen. It has the capacity to produce about 7,20,000 million tpa of hydrogen.
The government has announced a national hydrogen mission. IndianOil, which aims to build a network to retail hydrogen in future now also plans to venture into green hydrogen.