Indian Consortium, Saudi Aramco Ink MoU to Build Refinery-Petchem Complex

Ratnagiri Refinery and Petrochemicals Ltd. (RRPCL), a consortium of Indian oil companies including IOC, BPCL and HPCL has signed a Memorandum of Understanding (MoU) with Saudi Arabia’s national oil company, Saudi Aramco, to jointly develop and build the integrated mega refinery and petrochemicals complex at Ratnagiri. Saudi Aramco may also seek to include a strategic partner to co-invest in the mega refinery. The MoU was signed on the sidelines of the 16th International Energy Forum Ministerial in New Delhi recently.

Speaking after signing of the MoU, Oil Minister Mr. Dharmendra Pradhan, said, “The project cost is estimated at around Rs. 3 lakh crores ($44-bn). The refinery will be capable of processing 1.2 million barrels of crude oil per day (60 million tonnes per annum).”

The project will be set up as a 50:50 joint partnership between the consortium from India and Saudi Aramco, Mr. Pradhan said. The plan is to finish the project by 2025.

Mr. Khalid Al Falih, Minister for Energy, Industry and Mineral Resources, Saudi Arabia, said: “Saudi Aramco may include a strategic partner to co-invest in the project”. Elaborating on the refinery project, he said, the partnership brings together crude supply, resources, technologies, experience and expertise of multiple oil companies with an established commercial presence around the world.

A pre-feasibility study for the refinery has been completed, and the parties are now finalising the project’s overall configuration including the formation of a joint venture that would provide for joint ownership, control and management of the project.

The refinery will be capable of processing 1.2 million barrels of crude oil per day. It will produce a range of refined petroleum products, including gasoline and diesel, meeting BS-VI fuel efficiency norms. The refinery will also provide feedstock for the integrated petrochemical complex, which will be capable of producing approximately 18 million tons per annum of petrochemical production.

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 and centralised and shared utilities. Mr. Amin H. Nasser, Saudi Aramco’s President and CEO, said participating in the mega project will allow the Saudi Arabian oil company to go beyond the role of crude oil supplier to a fully integrated position which supports India’s future energy demands.

Keen on oil retailing

Mr. Al Falih also pointed out that Saudi Aramco had plans to get into petroleum retailing in India. “We are very much interested in retail, as we are into the business of providing fuel and energy and petrochemical products all the way to the consumers. We want to be consumer facing. Saudi Aramco does not want to be a manufacturing company only. It wants to be in every neighbourhood and every city in India providing energy and solutions to consumers…”

“We are very respectful of the regulatory environment and we would work closely with the government to ease the introduction of Saudi Aramco into the retail sectors,” he added.

India is a priority destination for Saudi Arabia because of its geographical proximity to the Kingdom and it has a large population and a large economy, Mr. Al Falih said.