Indian government-backed Oil and Natural Gas Corporation (ONGC) plans to set up two petrochemical plants with Rs1 trillion ($12bn) investment, reported Press Trust of India, via The Hindu.

At the second-quarter earnings call, ONGC director of finance Pomila Jaspal said the company plans to build separate oil-to-chemical (O2C) facilities.

ONGC executive director and chief of joint ventures & business development D Adhikari added: “We have plans to invest Rs1 trillion by 2028 or 2030 in two projects in two separate states.

“Our plan is to raise petrochemical capacity to 8.5-9 million tonnes by 2030.”

The energy company is likely to build one project alone and the second through a joint venture.

As the world looks to move away from fossil fuels, corporations all over the world are exploring ways to use crude oil.

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O2C facilities process crude oil into petrochemicals, which are used to manufacture detergents, fibres, polythene, and other types of plastics.

In India, the demand for petrochemicals is expected to remain strong as they are used in a variety of industries such as electronics, automotive, and construction.

Through the investment in the petrochemicals business, the state-run oil explorer is also expected to be able to reduce its dependency on the erratic oil market and increase profitability.

Currently, ONGC has two petrochemical subsidiaries Mangalore Refinery and Petrochemicals Limited and ONGC Petro-Additions Limited (OPaL).

In September, the ONGC board approved a financial restructuring of OPaL, which has amassed a large amount of debt.

As part of the plan, ONGC will invest Rs150bn in OPaL, which operates a petrochemical plant in Gujarat’s Dahej.