Indian refiners, some of the largest buyers of Nigeria’s oil, are planning to use green hydrogen to replace carbon-emitting fuels used in processing crude.
This push for the new age emission-free fuel comes at a time when India, the world’s third-largest oil importer, is recalibrating its energy sourcing playbook keeping its strategic and economic interests in mind.
State-owned Indian Oil Corporation Ltd. (IOC), India’s largest refiner has announced plans to build the country’s first green hydrogen plant at its Mathura refinery.
“We have got several expansion plans down the line which are already approved. We will not have a captive power plant and will utilise power from the grid, preferably green power. This will help decarbonise some part of the manufacturing,” according to remarks by Indian IOC executive quoted by The Economic Times.
“Petroleum refining and marketing with much higher petrochemicals integration will continue to be Indian Oil’s key focus area. We are going to add 25 million tonnes of refining capacity by the year 2023-24,” IOC chairman Shrikant Madhav Vaidya said in a statement
The company is set to rely on electric and hydrogen mobility in the coming decade to further reinforce its business in the sectors of petrochemicals, refining, and fuel retailing.
“While IndianOil has been working on various hydrogen production pathways, the current project at Mathura Refinery will be pioneering the introduction of green hydrogen in the Indian oil & gas sector,” the IOC statement said.
This comes in the backdrop of India considering a proposal to make it mandatory for fertilizer plants and oil refineries to purchase green hydrogen as part of plans to cut the nation’s dependence on fossil fuels.
To achieve this, there is growing traction for India’s push for green hydrogen gas, which is produced by splitting water into hydrogen and oxygen using an electrolyzer, that may be powered by electricity generated from clean energy sources such as wind and solar.
A case in point being Reliance Industries Ltd that has announced plans to build an electrolyzer giga factory and a fuel cell giga factory.
Nigeria relies heavily on India’s patronage to meet its crude oil sales targets as the government aims to maximize its oil revenue to finance its N13.588 trillion 2021 budget.
India is one of the largest buyers of the Nigerian oil and its renewed buying has supported values at a time most of the Nigerian crude oil barrels have been shipped to destinations across northwest Europe such as Spain, Netherland, France, Italy, and Germany.