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

Reuters  |  NEW DELHI 

By Nidhi Verma, and Florence Tan

NEW DELHI (Reuters) - on Wednesday signed an initial deal with a consortium of Indian refiners to build a $44 billion refinery and petrochemical project on India's west coast, as the kingdom moves to secure buyers for its crude in a market awash with

Top executives of and & Petrochemicals - a joint venture of Indian Corp, and Corp - signed a memorandum of understanding to take equal stakes in the project in

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 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 giant sealed refining and petrochemicals deals worth about $20 billion in and the

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.

"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," Saudi 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, he said.

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

"We have somebody in mind and we will announce in due course," said, without elaborating.

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 consumer. 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 after representatives of had met with their Indian counterparts on Tuesday.

During a visit to New Delhi in February, Falih had said would sign supply deals 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.

The company is further strengthening its refining role in China, one of its biggest customers. has a refinery joint venture with and Exxon Mobil, and is building a 300,000-bpd refinery with

"Because of our significant supplies to the Chinese market we are looking at additions," Nasser said, adding his company hopes to close a deal with this year to buy a stake in a 260,000-bpd refinery in

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

Nasser said he was not worried by rising supplies from regional rivals to

(Reporting by Nidhi Verma, and in NEW DELHI; Additional reporting by in DUBAI; Editing by Euan Rocha, and Dale Hudson)

(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. 17:05 IST