Saudi Aramco, UAE’s ADNOC partner to build India’s $44 bln refinery

Saudi Aramco, the world’s largest oil producer, and UAE's Abu Dhabi National Oil Company (ADNOC) signed a deal on Monday which allows ADNOC to partner in the building of the planned $44 billion crude oil refinery in Ratnagiri, Maharashtra.

“Saudi Aramco and ADNOC will together hold 50 per cent stake. The terms are being discussed,” Aramco CEO Amin Nasser told reporters in New Delhi, cited by the Press Trust of India.

In April, Saudi Aramco signed an agreement to take up to 50 percent stake in the 1.2 million barrels crude oil refinery project, which is planned to come on stream by 2025. The agreement allowed Aramco to dilute some of its equity stake in the refinery in favor of another strategic investor.

However, Nasser did not reveal the exact split of stake between Aramco and ADNOC.

As per the April agreement, Aramco will supply half of the crude oil required for processing at the refinery.

ADNOC will now supply some of the crude to be processed at the unit, PTI reported.

India’s state-owned refiners Indian Oil Corporation, Hindustan Petroleum Corporation and Bharat Petroleum Corporation own the remaining 50 percent stake in the Ratnagiri refinery.

Indian oil minister Dharmendra Pradhan said the investment by Aramco and ADNOC was “he largest ever overseas investment in the Indian refining sector,” on his official Twitter account.

The Mou between India 🇮🇳, Saudi Arabia 🇸🇦 & UAE 🇦🇪 symbolises a strategic partnership to harmonise experience, expertise, resources & technologies for mutual benefits. The investment by #ARAMCO & #ADNOC is the largest ever overseas investment in the Indian refining sector. pic.twitter.com/9TPUynmVwP

— Dharmendra Pradhan (@dpradhanbjp) June 25, 2018

Saudi Arabia was the biggest oil supplier to India until 2016-17, but slipped behind Iraq last fiscal year. It had supplied 39.5 million tons of crude oil to India in 2016-17, ahead of 37.5 million tons by Iraq.

India has a refining capacity of 232.066 million tons, which exceeded the demand of 194.2 million tons in 2016-17 fiscal.

Demand for crude is expected to reach 458 million tons by 2040, according to the International Energy Agency.