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India, Saudi Aramco agree to partner on $44 billion refinery-petchem project

Reuters  |  NEW DELHI 

By Nidhi Verma, and Florence Tan

NEW DELHI (Reuters) - and a consortium of Indian state refiners agreed to build a mega refinery and petrochemical project on for an estimated $44 billion, oil officials at the signing of an initial agreement said on Wednesday.

Top executives of and (RRPL) - a joint venture of Indian Oil Corp, and Corp - signed a memorandum of understanding to take equal stakes in the project in state.

The project includes a 1.2 million-barrel-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.

The plant will be one of the largest refining and petrochemical complexes in the world, built to meet fast-growing fuel and petrochemicals demand in and elsewhere, and providing a steady outlet for Saudi crude oil, they said.

"Large as this project may be, it does not by itself satisfy our desire to invest in ... We see as a priority for investments and for our crude supplies," said.

"We're very much interested in ... We want to be consumer facing," he said.

will supply at least 50 percent of the crude to be processed at the planned refinery, officials said.

Aramco may introduce at a later stage another strategic partner to share its 50 percent stake, Falih said.

Saudi's petrochemical company is also keen to invest in a cracker and other facilities in India, he said.

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

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

The signing confirmed a story that ran earlier on Wednesday after representatives of Aramco held a marathon meeting with their Indian counterparts on Tuesday.

Saudi Aramco, the world's biggest oil exporter, 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 New Delhi in February, Falih had said would sign as part of any agreements to buy stakes in Indian refineries, a strategy it 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 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)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, April 11 2018. 14:00 IST