BJP, Sena spar over Saudi Aramco's $44-billion refinery project

Oil and gas giant Saudi Aramco's $44-billion refinery project at Nanar in Ratnagiri has become a bone of contention between the Maharashtra government and the Centre, with the Shiv Sena opposing the project and the Modi government pushing to expedite it.

Last week, in a U-turn, the Maharashtra Navnirman Sena supported the project, joining the ranks of the main opposition party, Bharatiya Janata Party (BJP), and the Sharad Pawar-led Nationalist Congress Party (NCP), which is part of the ruling coalition government in the state. The Congress, the other partner in the government, has “no position on it”, said a top party source, adding that the Sena would be under pressure now with Covid-19 having affected revenues and making every new dollar of investment more valuable than ever before.

According to government sources, while some of the local people have now decided to support the project, citing employment potential and adequate compensation, others are still opposing, with the Shiv Sena leading the agitation.

The Sena’s objections are the environmental impact the project will have on farming and fishery in the area. The Congress points out that the project is located barely 50 km from Jaitapur, the site of a proposed nuclear power plant and this is weighing heavy on the government’s mind.

However, in a news conference on Wednesday, Chief Minister Uddhav Thackeray said the refinery would be started in Maharashtra only and the state would not allow the project to go out. “We will find an alternative location for this refinery project,” he said. The Sena, he said, was opposing the project due to agitation by local people. “Ïf they are okay with the project, then we have no issues,” he added.

While Aramco would own 50 per cent in the proposed entity, HPCL, BPCL and Indian Oil would pick up the rest of the stake. The Maharashtra government is currently looking for an alternative site in Raigad district for the refinery and petrochemical project, but no concrete step has been taken as yet. Congress sources said a shift in location was highly unlikely as the costs would no longer be viable for the investors.

“Due to the pandemic, there was a lull in the project, but now the Union government wants to revive it,” said a government official. “There are other mega projects also, like bullet train, which are facing delays due to land acquisition issues in Maharashtra. In the case of Mumbai Metro, a yard has not been identified yet. The Navi Mumbai airport is another marquee project that has got delayed,” he added.

The Ratnagiri project needs 16,146 hectares of land in the Konkan coastal belt. Saudi Aramco had earlier targeted to start construction by 2021 and commission by 2025. The Maharashtra government instead proposed a pharma city at the site in October last year under the Atmanirbhar plan of the Modi government.  The state government had said the refinery was not a priority as locals were opposing it. There is no clarity on the alternate site also.

For Saudi Aramco, a mega refinery here will not only help it sell its crude oil to India but at the same time get a ready customer base for its finished products. Threats from neighbouring countries and attacks from the Houthi rebels in Yemen are also making Saudi to look for alternative sites.