Rescue plan for refinery project, India seeks Saudi investment in strategic oil storage

Rescue plan for refinery project, India seeks Saudi investment in strategic oil storage

AgenciesUpdated: Wednesday, May 29, 2019, 01:21 AM IST
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Minister for Petroleum and Natural Gas Dharmendra Pradhan |

New Delhi: India has invited Saudi Arabia to invest in its strategic oil storage even as it looks to resurrect a USD 44 billion (Rs 3.08 lakh crore) refinery project with the world’s largest oil producer after the BJP-ruled Maharashtra government denied land at the initial site.

Saudi Oil Minister Khalid Al Falih, on his second visit to India in three weeks, discussed with its Indian counterpart Dharmendra Pradhan the 60 million tonne (MT) a year mega oil refinery cum petrochemical complex, whose initial allocated land in coastal Ratnagiri district of Maharashtra was denotified by the state government earlier this month, as part of electoral understanding between the ruling BJP and Shiv Sena.

“The (two) ministers reviewed various Saudi investment proposals in the Indian oil and gas sector, including the urgent steps to be taken to expedite the implementation of the first joint venture West Coast Refinery and Petrochemical Project in Maharashtra, estimated to cost USD 44 billion, which will be the largest greenfield refinery in the world,” an oil ministry statement said Sunday.

The two ministers held talks late Saturday night. Shiv Sena had opposed the project at Ratnagiri district and the BJP agreed to its demand of shifting out the project as part of electoral understanding for the ensuing Lok Sabha polls. No alternate site of the project has yet been identified and the statement did not elaborate on steps to be taken for implementation. Saudi Aramco and its partner ADNOC of UAE have signed agreements to take 50% stake in the project.

The remaining is held by public sector oil firms – IOC, BPCL and HPCL. India during the meeting has voiced its concerns on rising crude oil prices and its effect on the domestic fuel rates to Saudi Arabia Petroleum Minister. Speaking to Al-Falih here on Saturday, Pradhan talked of the need for uninterrupted supplies of crude oil and LPG to India in view of the supply cut by OPEC and other oil producers.

Al-Falih’s visit follows the first state visit of the Saudi Crown Prince Mohammed bin Salman in Feb this year. “Both ministers also discussed about the possible adverse impact of recent geopolitical developments on global oil market,” the statement said. India, which meets 83 pc of its oil needs through imports, built the storages as insurance for any disruption in supplies. It has the right of first refusal to buy the crude oil stored in the facilities in case of an emergency.

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