Ahead of its initial public offering in 2019, Saudi Aramco has announced a series of major contracts globally, the highlight of which was a $44 billion mega project in India.
The company announced April 11 that it had signed a memorandum of agreement with a consortium of Indian energy companies — Ratnagiri Refinery and Petrochemicals Ltd. — to build an integrated “mega refinery and petrochemical complex at Ratnagiri, in the western coast of India.
The consortium includes the Indian Oil Corp. (IOCl), Bharat Petroleum Corp. (BPCL), and Hindustan Petroleum Corp. (HPCL). Additionally, Saudi Aramco may also seek to include a strategic partner to co-invest in the mega refinery.
A pre-feasibility study for the refinery has been completed and the parties are finalizing the project's overall configuration.
The refinery will be capable of processing 1.2 million barrels of crude oil per day and will produce a range of refined petroleum products, including gasoline and diesel, meeting BS-VI fuel efficiency norms.
It will also provide feedstock for the integrated petrochemical complex, which will be capable of producing approximately 18 million tonnes per annum of petrochemical production.
Commenting on the deal, Serena Huang, senior analyst with Wood Mackenzie, said the project would be the “largest refinery in Asia.”
According to Huang, while the configuration of the petrochemical complex has not been finalized, prior indications from the Indian consortium have placed the ethylene capacity for the project at 3 MMTPA.
“This figure is double that of the current largest domestic cracker owned by Reliance at Jamnagar. Structurally, despite investments in the ethylene chain, India will remain a net importer of ethylene derivatives, especially polyethylene. It will likewise remain net short of polypropylene. Thus, the planned petrochemical complex should supplement India's rapidly growing polyolefins demand,” she noted.
The investment in India was the last in a series of announcement made by Aramco this week. In the U.S., the company signed MOUs worth between $8 billion to $10 billion with Honeywell UOP LLC and TechnipFMC plc on 7 April.
Also in France, the company signed a number of MOUs with French companies on April 10, including a $5 billion agreement for a petrochemical complex in Jubail, Saudi Arabia.