New Delhi: India on Wednesday signed a strategic partnership with Saudi Arabia to jointly build a 1.2 million barrels per day-capacity integrated refinery and petrochemicals complex on the west coast in the Ratnagiri district of Maharashtra.
The memorandum of understanding (MoU) to set up the Ratnagiri Refinery and Petrochemicals Ltd (RRPCL) was signed here between an Indian consortium consisting of state-run oil marketing companies (OMCs) Indian Oil, Hindustan Petroleum and Bharat Petroleum and Saudi national oil company Aramco, on the sidelines the 16th International Energy Forum (IEF) ministerial inaugurated by Prime Minister Narendra Modi.
Saudi Arabian Petroleum Minister Khalid Al-Falih was among those who addressed the inaugural session.
According to an Indian Petroleum Ministry release, the project cost is estimated at around Rs 3 lakh crore ($44 billion) and while the Indian companies will jointly own 50 per cent stake in the venture, Saudi Aramco and an additional strategic partner will hold the balance equity.
"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," it said.
"The refinery will produce a range of refined petroleum products, including petrol and diesel meeting BS-VI fuel efficiency norms. It will also provide feedstock for the integrated petrochemicals complex, which will be capable of producing around 18 million tonnes per annum of petrochemical products.
"In addition to the refinery, cracker and downstream petrochemicals facilities, the project will also include the development of associated facilities such as a logistics, crude oil and product storage terminals, raw water supply project as well as centralised and shared utilities," it added.
The world's biggest oil producer Saudi Aramco opened its Asia office here last year.
In his address at the IEF16, the Saudi Petroleum Minister called for creating "an enabling environment along the entire value chain" as fossil fuels "will be there for some time to come".
Noting that the future supply situation of energy sources, particularly of oil, is "not reasssuring", Al-Falih said the producers in the Organisation of Petroleum Exporting Countries (OPEC) "remain committed to the long-term market".
"Saudi Arabia and Russia are discussing extending the cooperation and monitoring of the market to extend stability," he said referring to the crude output cuts agreed in 2017 between OPEC and Russia in a move to stop the slide in oil prices that had fallen to around $25 a barrel two years ago. Crude currently is averaging around $70 a barrel.
During his previous visit here in February, Al-Falih had said Aramco is also looking to buy stake in existing Indian refineries and in their capacity expansion.
"The projects will have risks, the markets will have risk, but India has no risk and have told the Aramco team to assign zero political and regulatory risk to India and treat it as part of Saudi Arabia," he told reporters.
"And we are here to invest, we are here to grow, we are here to be part of India's landscape. We will match that with commitment, with action and with unmatched flow of FDI," he added.