Reliance Industries Limited to boost refining margins

MUMBAI: Reliance Industries Limited (RIL) will boost refining margins by $3 a barrel in three to four years from it $4-billion investment to build one of the world's largest gasification projects that will use make synthesis gas from petcoke, industry sources said.

The project would be completed in three to four years, and recover the investment in about three years, a source close to the company said.

"The gasification project will kick-start RIL's $12-billion investment in refining and petrochemical business. It will boost the gross refining margins of its refineries by $3 per barrel," the source said.

Refining margins, or the money earned from converting crude oil into oil products, such as petrol and diesel, is a key driver of Reliance Industries profit. Asian refiners have been hit by a downturn in global refining margins, which industry experts say would be range-bound for a few quarters because of weak global demand and turmoil in Europe.

Synthesis gas will replace costly LNG to cuts costs, and also be used as feedstock for other plants. It will also help raise output of high-value products from the refinery.