State-owned energy major Saudi Aramco and a consortium of three Indian oil companies signed on 11 April a memorandum of understanding (MoU) to jointly develop and build an integrated refinery and petrochemical complex in the west coast of India.
The project at Ratnagiri in the state of Maharashtra is estimated to cost around $44bn, Saudi Aramco said in a statement. Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) have incorporated a joint venture firm called Ratnagiri Refinery & Petrochemicals Limited (RRPCL) for the project.
The proposed refinery will be capable of processing 1.2m barrels of crude oil per day and provide feedstock for the integrated petrochemical complex, which will have about 18m tonnes/year in capacity.
The overall configuration of the project is being finalized by the parties following completion of a pre-feasibility study for the refinery, Saudi Aramco said.
“In addition to the refinery, cracker and downstream petrochemical facilities, the project will include associated facilities such as a logistics, crude oil and product storage terminals, raw water supply, as well as centralized and shared utilities,” it said.
The Saudi energy giant may seek to include a strategic partner to co-invest in the Ratnagiri project.
“Investing in India is a key part of Saudi Aramco’s global downstream strategy, and another milestone in our growing relationship with India,” Saudi Aramco president and CEO Amin Nasser said. “The signing marks a significant development in India’s oil and gas sector, enabling a strategic joint venture and investment partnership that will serve India’s fast-growing demand for transportation fuels and chemical products,” he added.
The planned Ratnagiri refinery is expected to produce a range of refined petroleum products, including motor spirit and diesel, which will meet Euro VI fuel specifications, IOC said in a filing to the Bombay Stock Exchange (BSE).
“Participating in this mega project will allow Saudi Aramco to go beyond our crude oil supplier role to a fully integrated position that may help usher in other areas of collaboration, such as refining, marketing, and petrochemicals for India’s future energy demands,” Nasser said.
The signing of the mega refinery project in India followed Saudi Aramco’s deal with French energy firm Total for a $5bn petrochemical complex in Jubail, Saudi Arabia, as well as the finalisation of its petrochemical joint ventures with Malaysia’s state-owned oil and gas firm PETRONAS.
TOTAL DEAL IN JUBAIL
Saudi Aramco and Total have signed a memorandum of understanding (MoU) to build a “giant” petrochemical complex at their SATORP refinery in Jubail, eastern Saudi Arabia, the French energy major said on 10 April.
The complex will be integrated downstream of the SATORP refinery, a joint venture between Aramco (62.5%) and Total (37.5%). The refinery has the capacity to process 440,000 bbl/day.
The petrochemical complex will comprise a mixed-feed steam cracker (50% ethane and refinery off-gas) with a capacity of 1.5m tonnes/year of ethylene plus related petrochemicals.
Satorp, an Aramco/Total JV
Total said total capital expenditure (capex) for the project would stand at around $5bn. The companies are planning to start the front-end engineering and design (FEED) in the third quarter. “The cracker will feed other petrochemical and specialty chemical plants representing an overall amount of $4bn investment by third party investors,” said Total.
“In total, $9bn will be invested, creating 8,000 local direct and indirect jobs. The project will produce more than 2.7m tonnes [/year] of high value chemicals.” The MoU between Total and Aramco (a state-owned company) was signed in Paris on 10 April, coinciding with the official visit to the French capital of Saudi Crown Prince Mohammed bin Salman.
The petrochemical complex would also share industrial space with Sadara Chemical Company, the joint venture between Aramco (65%) and Dow Chemical (35%).
The move would fit Saudi Arabia’s ambitions to diversify its economy away from crude oil and into more downstream sectors, according to Aramco’s CEO Amin H. Nasser.
The country has framed the strategy within the Saudi Vision 2030, announced in 2016.
“Our joint venture SATORP is a remarkably successful model of industry partnership and we are keen to build on this success to further underpin Saudi Aramco’s strategy to expand its capacity in the chemicals sector by 2030,” said Nasser.
Total’s CEO, Patrick Pouyanne, said production from the complex would target the growing Asian urban, middle class markets and their need for polymers. He also highlighted how the facility’s location would take advantage of the Saudi Arabia’s plentiful and affordable feedstock.
“Furthermore, this project will enable us to strengthen our ties with Saudi Aramco, with whom we successfully operate our biggest and most efficient refinery in the world,” said Pouyanne.
“Finally, it will contribute to the Vision 2030 of the Kingdom by creating 8,000 jobs and bringing in new high-added-value technologies.”