Saudi Aramco signs $44 bn deal for Indian refinery complex

Top executives of Aramco and India's Ratnagiri Refinery & Petrochemicals signed a memorandum of understanding to take equal stakes in the project in Maharashtra.

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    Saudi Aramco

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Saudi Aramco recently signed an initial deal with India's Ratnagiri Refinery & Petrochemicals – a JV of Indian Oil Corp, Hindustan Petroleum Corp and Bharat Petroleum Corp – to build a US $44 billion refinery and petrochemical project in Maharashtra with equal stakes. The project includes a 1.2-million-barrels-per-day (bpd) refinery integrated with petrochemical facilities with a total capacity of 18 million tonnes per year, the officials said on the sidelines of the International Energy Forum. 

Aramco, the world's biggest oil producer, is expanding its footprint globally by signing new downstream deals and boosting the capacity of its existing plants ahead of an initial public offering that is expected later this or next year. Days earlier, state oil giant Aramco sealed refining and petrochemicals deals worth about $20 billion in France and the United States. 

The Indian plant will be one of the largest refining and petrochemical complexes in the world, built to meet fast-growing fuel and petrochemicals demand in India and elsewhere. “Large as this project may be, it does not by itself satisfy our desire to invest in India. We see India as a priority for investments and for our crude supplies,” Saudi Energy Minister Khalid al-Falih said. Saudi Aramco will supply at least 50% of the crude to be processed at the planned refinery, he said. Aramco may introduce at a later stage a strategic partner to share its 50% stake, Falih said. Saudi petrochemical company SABIC is also keen to invest in a cracker and other facilities in India, Falih said.

Aramco, like other major producers, wants to tap rising demand growth and invest in the world's third-biggest oil consumer. Last year it opened an office in New Delhi. India outlined plans in February to expand its refining capacity by 77% to about 8.8 million bpd by 2030. Saudi Arabia is competing with Iraq to be India's top oil supplier. Iraq displaced Saudi Arabia for the first time on an annual basis in 2017, according to recent data.