India and Saudi Arabia will set up a joint task force to explore early implementation of the west coast refinery project for which the Arabian nation will invest $50 billion. A monitoring committee will also be created to ensure that the progress is as per plans.
At the first India-Saudi Arabia Strategic Partnership Council meeting on Monday, both countries agreed to diversify their hydrocarbons relationship into a comprehensive energy partnership. It was chaired by Prime Minister Narendra Modi and Saudi Arabia’s Crown Prince and Prime Minister Mohammed bin Salman Al Saud.
Secretary (CPV and OIA) Ausaf Sayeed said that both sides agreed to diversify the hydrocarbon relationship into a comprehensive energy partnership.
Both countries have extended full support to the early implementation of the west coast refinery project, which is a trilateral partnership between Saudi oil giant Aramco and Indian Oil Marketing Companies (OMCs), for which $50 billion is already earmarked, he added.
The two sides have agreed to set up a joint task force to help in identifying and channelising the $100 billion investment promised by the Saudi side, half of which is for the refinery and also to create a monitoring committee to ensure that the progress in the refinery project is as per plans laid out by both nations.
Refinery project
India is setting up the Ratnagiri Refinery and Petrochemicals (RRPCL) project, which is a joint venture company formed in September 2017 by Indian Oil Corporation (IOCL), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) with equity participation of 50:25:25.
Saudi Aramco and Abu Dhabi National Oil Company (ADNOC) have expressed their intent to partner in the 60 million tonnes per annum (MTPA) refinery, which will be built with an estimated cost of ₹3-lakh crore. A memorandum of understanding (MoU) was signed to this effect with the two oil and gas giants.
At present, the project has been delayed due to changes in location of plant, completion of site suitability studies, etc. Besides, the overall cost and timelines have not been determined as suitability of the site identified by the Maharashtra government has not been established. Environmental study can be carried out only after finalisation of land location.
The International Energy Agency (IEA) in a June 2023 report said that the fate of the planned 1.2 million barrels per day (mb/d) Ratnagiri refinery remains unclear. Land acquisition constraints are the latest roadblock to the project that was first proposed in the middle of the last decade. Even if finally approved, the refinery is not expected to come online in its forecast period (2022-2028).