Saudi Arabia is on an investment roll as it pushes forth with its economic roadmap that aims to diversify the country’s revenue sources. As part of this strategy, Saudi Aramco announced that it will develop a mega refinery, worth $44 billion, in the west coast of India in partnership with a consortium of Indian oil companies.
The Kingdom’s state-owned oil firm will jointly invest with The Indian Oil Corporation Ltd. (IOCl), Bharat Petroleum Corporation Ltd. (BPCL), and Hindustan Petroleum Corporation Ltd. (HPCL) to build the refinery and the petrochemicals complex at Ratnagiri in Maharashtra.
The refinery will have a capacity to process about 1.2 million barrels of crude per day but will not be limited to just that. The facility will also produce a range of refined petroleum products including gasoline and diesel while also providing feedstock for the integrated petrochemical complex that will have the capacity to produce about 18 million tons per annum of petrochemical production.
Aside from the refinery, the complex will have other facilities such as logistics, crude oil and product storage terminals, raw water supply, as well as centralized and shared utilities.
The refinery and petrochemical complex comes as Aramco eyes a larger role in fulfilling India’s growing energy needs. The company also opened an office in New Delhi last year as it seeks to ramp up its investments across Asia.
Saudi Aramco said in a statement that it is exploring options of a joint venture with the Indian consortium to operate the complex. The state-owned oil firm also said that it might also seek a partner to co-invest in this project at a later stage.
Saudi Aramco’s President & CEO Amin H. Nasser said that this investment is a key part of the company’s downstream strategy.
“The signing marks a significant development in India’s oil and gas sector, enabling a strategic joint venture and investment partnership that will serve India’s fast-growing demand for transportation fuels and chemical products.
“Participating in this mega project will allow Saudi Aramco to go beyond our crude oil supplier role to a fully integrated position that may help usher in other areas of collaboration, such as refining, marketing, and petrochemicals for India’s future energy demands,” said Nasser.
Ahead of its much awaited IPO, Saudi Aramco has taken on an active investment role this year which has seen it diversifying its projects across various geographies. Earlier this year, the company signed a deal with France-headquartered energy giant Total to build a petrochemical complex at its refinery in Jubail. Saudi Aramco holds 62.5% in the refinery while Total has a share of 37.5% in the project. The project is expected to add 8,000 jobs to the economy.