In a significant move towards diversification and sustainable energy initiatives, Oil and Natural Gas Corporation (ONGC), India’s largest oil and gas producer, has received approval from the Ministry of Petroleum and Natural Gas for the establishment of a new subsidiary company. The proposed company, named ‘ONGC Green Limited,’ is set to become the focal point for ONGC’s gas business and clean energy projects, including ventures into green hydrogen.
The approval, detailed in a stock exchange filing, marks a crucial step in ONGC’s strategic plan to venture into new and environmentally conscious areas of the energy sector. The company’s board, in a meeting held on Tuesday, gave the green light for the formation of the wholly-owned subsidiary, which will encompass various aspects of the energy value chain.
ONGC Green Limited is poised to engage in diverse energy businesses, including green hydrogen, hydrogen blending, renewable energy (solar, wind, and hybrid), biofuels/biogas, and liquefied natural gas (LNG). This move aligns with ONGC’s ambitious plan to invest Rs 1 lakh crore in installing 10 GW of renewable energy capacity and establishing two million tonnes of green ammonia annual production capacity by 2035, as part of the company’s comprehensive decarbonisation strategy.
The establishment of a separate unit for importing LNG and trading in gas was proposed by ONGC in February 2021. Although being the largest gas producer in India, ONGC has not been directly involved in trading the fuel. The company typically sells the gas it produces to government-identified buyers, with the government determining the selling price for most of the natural gas. The move to form a wholly-owned subsidiary for gas business reflects ONGC’s strategic intent to enhance its role and presence in the gas trading sector.
In addition to the formation of ONGC Green Limited, the company’s board has given in-principle approval for the creation of a joint venture company. This venture, either directly or through an affiliate, will be established in collaboration with NTPC Green Energy Ltd, a wholly-owned subsidiary of NTPC Ltd. The joint venture aims to explore opportunities in offshore wind energy and other renewable energy sources.
The collaboration with NTPC Green Energy Limited, initiated in September last year, extends beyond offshore wind projects. The partnership envisions joint efforts in storage, e-mobility, carbon credits, green credits, nuclear, green hydrogen business, and its derivatives such as green ammonia and green methanol.
