Saudi Aramco will pick up 50% stake in the planned integrated mega refinery and petrochemicals complex, being built with an investment of $ 44 billion at Ratnagiri.
Saudi Arabian Oil Company (or Saudi Aramco), the world's largest oil and gas company by revenue ($ 455.49 billion), has agreed to pick up 50% stake in the proposed $44-billion refinery-cum petrochemicals complex in Ratnagiri (Maharashtra). being developed by Indian state-owned refiners that’s set to be one of the biggest in the world.
Ratnagiri Refinery and Petrochemicals Ltd (RRPCL) - a consortium of Indian oil companies which includes the Indian Oil Corporation Ltd (IOCL), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL) – is setting up an integrated mega refinery and petrochemicals complex in Ratnagiri. Saudi Aramco has signed a memorandum of understanding (MOU) with RRPCL for the JV. Saudi Aramco is also seeking to include a strategic partner to co-invest in the mega refinery.
The strategic partnership between Aramco and RRPCL brings together crude supply, resources, technologies, experience, and expertise of these multiple oil companies with an established commercial presence around the world.
A pre-feasibility study for the refinery has been completed and the parties are now finalising the project’s overall configuration. Following the signing of the MoU, the parties will extend their collaboration to discuss the formation of a joint venture that would provide for joint ownership, control, and management of the project.
The refinery will be capable of processing 1.2 million barrels of crude oil per day. It will produce a range of refined petroleum products, including gasoline and diesel, meeting BS-VI fuel efficiency norms. The refinery will also provide feedstock for the integrated petrochemical complex, which will be capable of producing approximately 18 million tons per annum of petrochemical production.
In addition to the refinery, cracker and downstream petrochemical facilities, the project will include associated facilities such as a logistics, crude oil and product storage terminals, raw water supply, as well as centralised and shared utilities.
Ratnagiri Refinery and Petrochemicals Ltd (RRPCL) will rank among the largest world refining and petrochemicals projects and will be designed to meet India’s fast-growing fuels and petrochemicals demand. The project cost is estimated at around $44 billion. At present, the Reliance Industries Ltd refinery complex at Jamnagar in Gujarat is the biggest in the world with a total capacity of 68 million tonnes.
“Investing in India is a key part of our company’s global downstream strategy, and another milestone in our growing relationship with India,” said Amin H Nasser, President and CEO, Saudi Aramco.
Nasser added, “The signing marks a significant development in India’s oil and gas sector, enabling a strategic joint venture and investment partnership that will serve India’s fast-growing demand for transportation fuels and chemical products. Participating in this mega project will allow Saudi Aramco to go beyond our crude oil supplier role to a fully integrated position that may help usher in other areas of collaboration, such as refining, marketing, and petrochemicals for India’s future energy demands.”
Saudi Aramco’s JV plan is considered to be among the largest foreign investments in India’s hydrocarbons sector. The move will give the world’s biggest oil producer (Aramco) a key stake in the world’s third largest oil consumer (India) and ensure it remains a steady customer.
Indian oil & gas sector has witnessed quite a few foreign investments in recent times. Last year, Russia’s Rosneft had purchased Essar Oil’s 20-MT refinery in Gujarat for $13-billion.