IOC to sell hydrogen plants

New Delhi: State-run Indian Oil Corporation (IOC) plans to sell hydrogen generating plants at its oil refineries to monetise non-core assets and leverage operational efficiencies by bringing in domain experts, its Chairman Shrikant Madhav Vaidya said on Tuesday.

To begin with, the company will sell its hydrogen generating unit at its Gujarat refinery and based on the experience, may take up units at other refineries, he said. The sale is part of the asset monetisation agenda of the government aimed at generating revenue from selling to private investors unutilised or part utilised assets.

"These (hydrogen generating units) are already operating units. Now we are trying to leverage the efficiency of operations by handing it over to the licensor of the unit," he said. Hydrogen is mostly produced from natural gas and naphtha and is used in the processing of intermediate oil products and for the removal of sulphur from refined fuels to meet emission standards. The sale consideration will be the asset value and the operation and maintenance (O&M) charge that the new operator will charge from IOC, Vaidya said. "These units are located within the refinery complex and I will be the only buyer, consumer (of hydrogen)," he said. IOC will sell 100 per cent stake in the 70,000 tonnes per annum hydrogen generating unit at Gujarat refinery.

"The idea is to get somebody who can operate the unit better. All other units of the refinery are my core business but hydrogen is a utility," he said. The government has identified assets across sectors that can be monetised for as much as Rs 2.5 lakh crore. Of this, Rs 17,000 crore is being targeted to be raised from selling stakes in pipelines of IOC, gas utility GAIL and Hindustan Petroleum Corporation Ltd (HPCL). Vaidya said IOC is working on a long-term energy transition strategy, which would involve producing hydrogen in a cost-effective way as well as developing technology to combine compressed natural gas with hydrogen. India is joining nations like China, South Korea and Japan in speeding up research on how to embrace hydrogen in its energy mix and cut dependence on fossil fuels.