Saudi Arabia, India plan to jointly build two oil refineries

MUMBAI (ICIS)–Two oil refineries will be built in India as part of Saudi Arabia’s $100-billion investment pledged to the south Asian nation which would cover cooperation in multiple areas, including energy and petrochemicals.

• High-level joint task force finalizes plans for joint cooperation in multiple sectors
• Both countries to develop supply chains, projects linked to energy sector
• Green hydrogen infrastructure collaboration plans on

The projects, which will be built in partnership with the Indian government, and agreements to enhance cooperation with the world’s biggest crude exporter across various industries were announced on 22 April, during a state visit by Indian Prime Minister Narendra Modi to Saudi Arabia.

Collaborations are also planned in the pharmaceuticals, infrastructure, technology, fintech, digital infrastructure, telecommunications, manufacturing and health sectors, among others, according to a statement from the Prime Minister’s Office (PMO) of India on 23 April.

In 2023, the two countries agreed to set up a joint committee to expedite Saudi Arabia’s $100-billion investments in India which was announced in February 2019.

A high-level task force set up by the two countries has now finalised plans in multiple areas which will allow both countries to begin work soon, the PMO stated.

The countries will also work towards developing supply chains and projects linked to the energy sector, it added.

The two nations have agreed to enhance cooperation in the supply of crude oil and its derivatives, including liquefied petroleum gas (LPG), the government statement said, adding that collaborations in the field of green hydrogen, including developing hydrogen transport and storage technologies, would also be explored.

Saudi Arabia is India’s fourth largest trading partner and is the third largest exporter of crude oil to the south Asian country.

In the fiscal year ending March 2024, India’s goods imports from Saudi Arabia stood at $31.4 billion, while exports to the nation were at around $11.6 billion, official data showed.

Its major exports to Saudi Arabia include petroleum products, engineering goods, rice, chemicals, textiles, food products while imports from Saudi include crude oil, liquefied petroleum gas (LPG), fertilisers, chemicals, plastics, among others.

RATNAGIRI MEGA REFINERY PROJECT IN QUESTION
About seven years ago, Saudi Arabia signed a deal with Indian refiners to build a mega refinery and petrochemical complex in the west coast of India, but the project hit a snag.

The 60 million tonne/year project in the Maharastra state which was estimated to cost $44 billion to build was supposed to be commissioned by 2022, faced delays due to land acquisition problems.

Opposition to the project continues and there has been no breakthrough in discussions with villagers in the area.

There was no official announcement from the central government on the fate of the proposed Ratnagiri mega-refinery and petrochemical project.

Maharashtra chief minister Devendra Fadnavis, in a February 2025 interview at an Indian daily Economic Times, had said that instead of one mega refinery project, three small ones will be built – one in Ratnagiri and the other two will be in two other states in southern India.

The refineries will each have a 20 million tonne/year capacity, he said.

Indian petroleum minister Hardeep Singh Puri in January this year announced plans to build smaller refineries at different locations in the country.

Focus article by Priya Jestin