Saudi Aramco keen to take stake in west coast refinery, says oil minister
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New Delhi: Saudi Aramco, the world’s largest oil producer, is interested in picking a stake in India’s biggest oil refinery being planned to be set up in Maharashtra at a cost of Rs1.8 trillion.
State-owned Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) together plan to set up a 60-million tonnes a year oil refinery on west coast to meet the rising fuel needs of the country.
“Saudi Aramco and Abu Dhabi National Oil Co (Adnoc) are talking to us for investments in the Indian oil sector,” Oil minister Dharmendra Pradhan said at the Global Natural Resources Conclave.
Later talking to reporters, he said Aramco is interested in picking a stake in the west coast refinery while Adnoc is keen on petrochemical projects. “Aramco is talking of stake in the refinery,” he said.
He, however, did not go into how much stake the Saudi national oil company will pick. “Let’s see,” is all he said. IOC holds a 50% stake in the project while BPCL and HPCL have 25% each. The 60-mt a year refinery will be set up in two phases, along with a mega petrochemical complex.
The phase-1 capacity will be 40 mt together with an aromatic complex, naphtha cracker unit and a polymer complex. This will cost Rs1.2-1.5 lakh crore and will come up in 5-6 years from the date of land acquisition. The mega complex will require 12,000-15,000 acres and land on the Maharashtra coast has been identified, he said.
The second phase, involving a 20 mt refinery, will cost Rs 50,000-60,000 crore. IOC has been looking at the west coast for a refinery as the company found it tough to cater to requirements in West and South with its refineries mostly in the North.
HPCL and BPCL too have been looking at a bigger refinery because of constraints they face at their Mumbai units.
The mega west coast refinery will produce petrol, diesel, LPG, ATF (aviation turbine fuel) and feedstock for petrochemical plants in plastic, chemical and textile industries in Maharashtra. A top official at one of the state refiners said the project will be funded with 60% debt and 40% equity.
The three refiners will chip in Rs72,000 crore in equity. Fifteen mt a year is the biggest refinery any public sector unit has set up at one stage.
IOC recently started its 15 mt unit at Paradip in Odisha. Reliance Industries holds the distinction of building the biggest refinery in India till now. It built its first refinery at Jamnagar in Gujarat with a capacity of 27 mt, which was subsequently expanded to 33 mt.
It built another unit adjacent to it for exports, with a capacity of 29 mt. The refinery being planned by the state-owned firms will be bigger than that. The phase-1 itself will be bigger than any one single unit. India has a refining capacity of 232.06 mt, which exceeded the demand of 183.5 mt in 2015-16.
According to the International Energy Agency (EA), this demand is expected to reach 458 mt by 2040.