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State-owned Oil and Natural Gas Corporation(ONGC) will set up a new unit to house its gas business and clean energy projects such as green hydrogen, as it looks to fast-track foray into new areas.

In a stock exchange filing, the firm said it last month received approval from the Ministry of Petroleum and Natural Gas for the formation of a wholly-owned subsidiary company for gas business and clean energy projects.

“The proposed name of the company is ‘ONGC Green Limited’ subject to the approval of the Ministry of Corporate Affairs, Government of India,” it said, adding the company board at its meeting on Tuesday approved the formation of the wholly-owned subsidiary for green energy and gas business.

The wholly-owned subsidiary company will be for value-chains of energy business such as green hydrogen, hydrogen blending, renewable energy (solar, wind and hybrid), biofuels/ biogas business and LNG, ONGC said.

The nation’s largest oil and gas producer plans to spend Rs 1 lakh crore on installing 10 GW of renewable energy capacity, and setting up two million tonnes of green ammonia annual production capacity by 2035 as part of its decarbonisation strategy.

ONGC had in February 2021 proposed a separate unit for importing LNG and trading in gas.

It is India’s largest gas producer but does not trade in the fuel. It sells most of the gas it produces from fields in Mumbai offshore and other places to buyers identified by the government.

The government also sets the price at which it would sell most of the natural gas, which is used to generate electricity, produce fertilizers and turn into CNG for running automobiles or piped to household kitchens for cooking.

In the filing, the company also stated that its board has accorded in-principle approval for the formation of a joint venture company either directly or through an affiliate with NTPC Green Energy Ltd (a wholly-owned subsidiary of NTPC Ltd).

“The said joint venture company shall be engaged in the business of offshore wind energy and other renewal energy,” ONGC said.

ONGC had in September last year inked an agreement with NTPC Green Energy Limited for the development of renewable energy projects. The agreement envisages collaborations on offshore wind projects and exploring opportunities in the storage, e-mobility, carbon credits and green credits, nuclear, green hydrogen business and its derivatives (green ammonia and green methanol).

ONGC has a renewable portfolio of 176 MW comprising 153 MW of wind power and 23 MW of solar. It is aiming to add 10 gigawatts of renewable power to its portfolio by 2040.