Mukesh Ambani, Asia’s richest man, is moving swiftly to secure American ethane gas as a safeguard against President Trump’s trade war.
Reliance Industries, his conglomerate, imports 1.6 million tonnes of ethane each year from U.S. shale fields, transporting it in massive tankers to its manufacturing facilities in Gujarat. This low-cost gas serves as an alternative to more expensive oil-based naphtha in plastic production, resulting in annual savings of around $450 million.
Trump was threatening 26% ‘reciprocal tariffs’ on Indian goods by July 9. During this time only Ambani has made India a major buyer of US energy. It will reduce tensions over India’s $43 billion trade surplus with America. He has started a new strategy of a fleet of six specialized ethane tankers, according to a Bloomberg report.
GAIL, an Indian govt run organisation is also trying to follow Ambani’s strategy to be in the race. It sought 20-year contracts for US ethane tankers after its natural gas supply was reduced due to the government policies and it reduced its profits.
Following Reliance’s path, GAIL may also transport ethane through pipelines to its chemical plants, replacing naphtha as a feedstock. The transition is critical as ethane is nearly half the cost of naphtha and produces more plastic per tonne.
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