Reliance Eyes US Ethane Expansion as Global Trade Landscape Transforms

Mukesh Ambani’s Reliance Industries is strengthening its strategic position in global energy trade by accelerating US ethane imports. As India reduces reliance on naphtha-based production, the shift toward ethane marks a significant transformation in the country’s petrochemical sector amid changing global trade policies and fuel economics.

Reliance Shifts to Ethane for Cost-Efficient Petrochemical Production

Ambani's long-term bet on North American ethane is coming to fruition. The STL Qianjiang, a special ethane carrier, is en route to Reliance’s Dahej terminal in Gujarat. Ethane, a natural gas component, is more efficient and cost-effective compared to naphtha, which was traditionally used by Indian refineries for ethylene production. Ethylene is essential in manufacturing plastics and related products.

Reliance’s ethane cracker unit, commissioned in 2017, was the first globally to conceptualise large-scale US ethane imports. With an 80% conversion efficiency compared to 30% for naphtha ethane’s economic and operational advantage is driving this strategic pivot.

US-China Trade Shifts Benefit India

Trade tensions between the US and China have created an opportunity for Indian companies like Reliance to capitalize on redirected US energy exports. Ethane cargos initially destined for China are now heading to India. This trade realignment could serve New Delhi’s interest in addressing trade deficits with Washington, offering a new narrative: India is buying more US gas.

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Growing Infrastructure for Ethane Logistics

Reliance already co-owns a fleet of six ethane carriers and plans to add three more. It is also developing a 100 km pipeline to transport ethane to another Gujarat processing unit. Meanwhile, ONGC and GAIL are investing in ethane infrastructure, including new vessels and cracking units. Mitsui OSK Lines will manage two large ethane carriers for ONGC, reinforcing this industry-wide transition.

Implications for India’s Fuel Economy

The increasing reliance on ethane may alter India’s crude oil economics. With lower demand for naphtha, state-owned refiners could face reduced profitability as petrochemical producers opt for the cheaper alternative. As a result, naphtha might lose its central role in making products like polyester, cosmetics, and pharmaceuticals.

Petrochemicals Strategy Meets Broader Energy Shifts

India’s fuel landscape is changing rapidly. Compressed natural gas vehicles accounted for a third of Maruti's sales last year. Ethanol blending mandates and the push for electric vehicles further challenge gasoline’s dominance. Despite this, government-backed refineries are still being developed partly driven by state incentives rather than market demand.

Reliance Industries Share Price Performance

On July 7, 2025, Reliance Industries share price opened at ₹1,526.60 on NSE, below the previous close of ₹1,527.30. During the day, it surged to ₹1,534.70 and dipped to ₹1,525.00. The stock is trading at ₹1,533.50 as of 9:16 AM. The stock registered a marginal change of 0.41%.

Over the past week, it has moved up by 0.33%, over the past month, it has moved up by 5.85%, and over the past 3 months, it has moved up by 31.55%.

Conclusion

Mukesh Ambani’s strategic investment in US ethane imports is reshaping India’s petrochemical industry while aligning with broader shifts in global energy trade. As ethane displaces naphtha, Reliance’s early move positions it for cost advantages and energy resilience. While India cannot match China’s scale, its rising imports of US feedstock may help balance trade dynamics and redefine its industrial future.

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