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India ready to give Saudi Aramco 50 percent stake in planned mega refinery - source

Reuters  |  NEW DELHI 

By Nidhi Verma, and Florence Tan

NEW (Reuters) - is set to grant a 50 percent stake in a planned 1.2 million-barrel-per-day (bpd) refinery on its west coast, said an industry source with knowledge of the deal, a move that would give the kingdom a new outlet for its

A preliminary agreement will be announced on Wednesday during a visit by Saudi minister and Amin Nasser's to New Delhi, two separate sources told on condition of anonymity. Falih is attending the International Energy Forum in

A memorandum of understanding (MoU) will be signed by Nasser on Wednesday, the sources said.

Aramco, like other major producers, wants to tap rising demand growth and invest in the world's third-biggest consumer. Last year it opened an office in New

outlined plans in February to expand its refining capacity by 77 percent to about 8.8 million bpd by 2030.

"There are some last minute negotiations on small issues, but both countries are almost ready to announce a deal," the first source told

did not immediately respond to a request for comment.

Representatives of held a marathon meeting with their counterparts from Indian companies on Tuesday.

Indian companies - Indian Oil, and - have floated a joint-venture & Petrochemicals (RRPL), to build the proposed refinery in the western state of

B. Ashok, of RRPL, who attended the meeting with declined to comment on the discussions.

Saudi Aramco, the world's biggest producer, is moving to invest in refineries overseas to help lock in demand for its crude, and expand its market share ahead of an initial public offering that is expected later this or next year.

During a visit to in February, Falih had said would also sign supply deals as part of the agreement to buy stakes in Indian refineries, a strategy the kingdom has adopted to expand its market share in and fend off rivals.

Last year, pledged billions of dollars of investments in refinery projects in and that came with supply deals.

is competing with to be India's top supplier. displaced for the first time on an annual basis in 2017, data compiled by showed.

(Reporting by Nidhi Verma, and in NEW DELHI; Additional reporting by in DUBAI; Editing by and Tom Hogue)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Wed, April 11 2018. 10:53 IST