Saudi Aramco, Indian consortium to build $44bn Ratnagiri complex

Michele Moreno
April 13, 2018

World's largest oil producer Saudi Aramco is keen on venturing into fuel retailing in India, but it will only do so after the planned Dollars 44 billion refinery-cum-petrochemical complex in Maharashtra is ready to function.

It said the Ratnagiri complex "will rank among the largest world refining and petrochemicals projects and will be created to meet India's fast-growing fuels and petrochemicals demand". Saudi Aramco expects to invest between $8 billion and $10 billion dollars in the projects, pending the evaluations.

The two sides signed an MoU to this effect here on Wednesday on the sidelines of the 16th International Energy Forum ministerial round in the presence of oil minister Dharmendra Pradhan and his Saudi counterpart Khalid Al Falih.

Already, the boom has spurred billions of dollars of investments in Gulf Coast petrochemicals operations, which have begun to replace traditional refining as a driver of crude oil demand. It remained India's biggest source of crude till 2016-17, before losing that position to Iraq.

The cracker will feed other petrochemical and specialty chemical plants representing an overall amount of US$4 billion investment by third party investors, it said, taking the total investment to US$9 billion.

Even after Saudi Arabia unexpectedly increased official crude pricing for May in Asia, demand in China was not affected, Nasser said. Thereafter, the refinery was set up by HPCL in joint venture with steel baron Lakshmi N Mittal.

"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.

Aramco, now a 50 percent stakeholder in the project, announced that it may, in the future, seek partners to share in its portion of the refinery stake. Reports say that the at least 50% of the crude oil will be processed at the planned refinery which will be supplied by Aramco.

Motiva Enterprises, a US-based subsidiary of Saudi Aramco, has signed MOUs worth between $8bn to $10bn with Honeywell UOP and TechnipFMC. Saudi Aramco does not want to be a manufacturing company only. Final investment decisions on these projects are not expected to be made until 2019 and are dependent on strong economics, competitive incentives, and regulatory support.

Other reports by Insurance News

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