India's Reliance Industries (RIL) will invest about $16 billion to expand its petrochemical production capacity and lower feed and fuel costs, a report said.

RIL is investing $4.6 billion in an integrated gasification combined cycle (IGCC) project that will convert captive petrocoke to synthetic gas (syngas) which can be used to generate power, steam and hydrogen, which currently are being produced using expensive imported LNG, said the NDTV quoting a Barclays Equity Research report.

Refinery off-gas from this unit will be used to extract petrochemical compounds like ethane, ethylene, propylene, butanes and propanes at a $4.5 billion refinery off-gas cracker (ROGC). Another $5 billion is being spent on expanding polyester production capacity, it said.

The firm will spend another $1.5 billion to import ethane from US to replace higher cost propane imports and naphtha, it said.

The projects will be completed by 2018.

Barclays said the projects will help add an estimated $1.2 billion to the company's pre-tax profit.

The IGCC will allow RIL to generate syngas from captive and bought petcoke. This syngas will generate power, steam and hydrogen and be used as fuel for the refinery allowing it to replace LNG and internal refinery off-gases which will be fed to a new $4.5 billion petchem unit (ROGC).