petronas: BP, Petronas race to invest in the new platform of the founders of Greenko

BP is competing with Petroliam Nasional Bhd or PetronasMalaysian state-owned energy company, investing $1.5-2 billion to acquire a substantial minority stake in a new platform wholly owned by two founders GreenkoAnil Chalamalasetty and Mahesh Kolli, said everyone knows about the development.

Discussions are already underway with both parties and Greenko is expected to choose one of two energy majors at the moment, the people mentioned above added. Once completed, it will be the largest foreign investment in a blue hydrogen and ammonia project to date in the United States. India.

It also comes as BP comes under pressure from two of the UK’s biggest pension funds, which oversee £130bn of assets. They have said they will vote against renewing the terms of top executives at BP and Shell unless both improve their commitments to tackle carbon emissions.

However, a spokesperson for BP India denied the development.

After committing to a net-zero carbon target by 2050, BP has backtracked on its pledge to cut oil and gas production by 2030. Chief Executive Bernard Looney said the group’s oil and gas output unions will fall only 25% from 2019 levels by 2030, down from the previous target of 40%.

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The new platform is planning to produce 4-5 MTPA green ammonia, green methanol and electrolyte at Kakinada in Andhra Pradesh, incurring capital costs of $10 billion. The platform has signed offtake agreements with Korea’s Posco, Germany’s Uniper SE and the state-owned company ONGC for green molecules from 2025. It has also signed an agreement with Singapore’s Keppel Infrastructure Holdings Pte to jointly explore building a factory. With Belgium-based John Cockerill, the new foundation plans to set up a giant factory for the production of electrolytes that split water into hydrogen and oxygen.

The Kakinada project is a multi-stage export facility that aims to add 1 MTPA of green ammonia production capacity by 2027 and is in line with India’s target of producing 5 million tonnes of green hydrogen per year by 2030.

Phase 1 of the facility will produce electrolysis-based green ammonia powered around the clock from 2.5 GW of renewable assets from the $3 Pinnapuram Integrated Renewable Energy Storage Plant $0.5 billion coming in Andhra Pradesh’s Kurnool district. That project will turn 4,000 MW of intermittent wind and solar energy into stable, schedulable energy through eight turbines that will spin and generate electricity using water discharged from an artificial reservoir. . This water, initially kept in the lower layer, will be pumped to the upper lake using energy obtained from green sources such as solar and wind before it is released. The technical term for this is pumped storage hydro.

Greenko and Petronas did not respond to questions.

The new platform will be separate from Greenko Energy Holdings, which is 52% owned by GIC of Singapore. Orix Corp of Japan owns 22% with Abu Dhabi Investment Authority holding 14%. Chalamalasetty and Kolli own 12% of Greenko Energy Holdings.

The Greenko founders were also able to attract some existing financial investors along with new investors for the venture, people with knowledge of the matter said. Strategic partners can also double their shares in the future.

Driven by geopolitical changes following the Ukraine war, the new hydrogen-centric economy is attracting billions of dollars in funding. According to BloombergNEF, annual hydrogen demand could increase fivefold to 500 million tons by 2050. The United States alone has earmarked $9.5 billion in funding and announced production tax credits under the Inflation Reduction Act. . Germany will spend $21 billion by 2026. The Port of Rotterdam is working on an ammonia biscuit. Korea is building a green ammonia import port.


India’s Presence
Both Petronas and BP are exploring cleaner, greener alternatives in India and around the world.

Petronas acquires Amplus Energy Solutions Pvt. Ltd, one of India’s largest rooftop solar manufacturers, in 2019 from New York-based I Squared Capital for Rs 2,700 crore and is looking to double it in one of the platforms emerging green economy most promising to diversify its investment portfolio.

It spent nearly a year unsuccessfully negotiating with tata corporation to invest in the group’s green energy business. The company also has a presence in India through its lubricants business.

Petronas also has a 50:50 joint venture over two decades with Indian Oil Corporation. for the import of LPG. The scope of this joint venture, IndianOil Petronas Pvt Ltd (IPPL), is being expanded to include fuel and nature Air marketing, the companies said in 2021. Until 2021, India contributes 2% to Petronas’ revenue through the sale of crude oil, condensate and petroleum products, according to the annual report. company year for that year.

Dependent industry and BP through their 2011 equity joint venture, India Gas Solutions, are engaged in the retailing and marketing of natural gas. Through the joint venture Reliance BP Mobility Ltd, the companies retail fuel through a network of more than 1,400 locations and 30 aviation fuel stations across India. They plan to bring this to 5,500 retail locations and 45 aviation fuel stations over the next few years.

Lightsource BP is an international solar business that, according to its website, operates exclusively in India through EverSource Capital, a partnership between Everstone Capital and Lightsource BP. Lightsource BP’s first solar project in India was completed in Wagdari, Maharashtra, in June 2018. This 60 MW peak capacity solar farm is spread over 240 acres and provides clean electricity to about 75,000 households in India. Eversource is on the shortlist for the $2 billion acquisition of Continuum Energy.


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