Saudi Aramco, Adnoc committed to $44 bn west coast refinery project
Millennium Post, Delhi   16-Oct-2020

Saudi Arabian Oil Co (Saudi Aramco) and Abu Dhabi National Oil Co (Adnoc) are still committed to investing in the planned USD 44 billion west coast refinery-cum-petrochemical project, the Chairman of the project's lead Indian partner said on Thursday.

Saudi Aramco's talks to buy a 20 per cent stake in Reliance Industries Ltd''s oil-to-chemical business for USD 15 billion, coupled with a crash in oil prices, slowing down of fuel demand, and land issues facing the west coast project had led to speculations of waning interest of the world''s largest oil exporter in the project.

"Both Adnoc and Saudi Aramco are still committed to the investments in the project," Indian Oil Corp (IOC) Chairman Shrikant Madhav Vaidya said at Energy Intelligence Forum 2020.

State-owned IOC, Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) together with Saudi Aramco and Adnoc plan to set up a 60 million tonnes refinery-cum-petrochemical complex on Maharashtra coast.

Land acquisition has led to delay in the project, but once the issue is sorted out, the project is going to come up with investments from Aramco and Adnoc, he said.

"We are certain and confident that the country needs this refinery to come up because of the growth the country is going to see in fuel demand in the future," Vaidya added.

Once the land issue is sorted out, both companies are committed to investing in the project, he said.

Aramco and Adnoc are to hold 50 per cent in the project, while IOC has a 25 per cent stake. The remaining 25 per cent is split equally between BPCL and HPCL.

India currently has an oil refining capacity of about 250 million tonnes per annum (about 5 million barrels per day). Fuel demand is expected to double to 10 million bpd by 2050 and refining capacity would need to be augmented to meet that else the country would have to import petrol, diesel and ATF.

Aramco and Adnoc see themselves as principal oil suppliers to the west coast refinery. In fact, talks of Aramco picking up a 20 per cent stake in Reliance''s O2C business were conditioned on it supplying 5,00,000 barrels of oil per day (bpd).