India, Russia sign oil supply deal; eye petrochemical, gas projects
MUMBAI (ICIS)–Russia’s state-owned energy firm Rosneft will supply nearly 2m tonnes of crude oil to Indian Oil Co (IOC) next year.
This is among the 28 investment pacts signed between Russia and India on 6 December which also include deals in the petrochemical, gas and fertilizer sectors.
Under the Rosneft-IOC deal, the Russian energy firm will supply oil from the Black Sea port of Novorossiysk to the Indian firm in 2022.
The two companies had signed a similar deal in February 2020.
Exploring partnerships in the petrochemical sector were also discussed in the recently concluded 21st India-Russia Summit, during Russian President Vladimir Putin’s state visit to the south Asian nation,
“Both sides, appreciating the strength of the Indian petrochemical market, agreed to expand collaboration through Russian participation by way of investment, technological and other ways of collaboration in Indian petrochemical sector,” India’s Ministry of External Affairs stated.
Nayara Energy, which is 49.13%-owned by Rosneft, plans to expand into petrochemical production with a 450,000 tonne/year polypropylene (PP) plant.
Currently, the company operates a 20m tonne/year refinery at Vadinar in the western Gujarat state.
Meanwhile, IOC is exploring the feasibility of setting up a dual-feed cracker along with downstream units at its Paradip refinery in the eastern Odisha state, in collaboration with Russian petrochemicals company SIBUR.
SIBUR currently has a joint venture with Indian conglomerate Reliance Industries Ltd (RIL) called Reliance Sibur Elastomers, which operates a 120,000 tonne/year butyl rubber facility at Jamnagar in Gujarat. RIL owns 74.9 % of the company, while SIBUR holds the remaining 25.1%.
IOC is also exploring a technical tie-up with Russian oil and gas firm Gazprom Neft.
On fertilizers, a long-term agreement between the two countries should ease the severe supply shortage in India.
Four Indian state-owned companies and Russia’s PhosAgro have signed a deal related to fertilizer supply for the fiscal year ending March 2022.
PhosAgro is expected to supply five types of fertilisers including diammonium phosphate (DAP), India’s chemicals and fertilisers minister Mansukh Mandaviya said.
In the gas sector, India and Russia are looking at investing in infrastructure and distribution projects, including the use of natural gas in transportation and fuels like hydrogen.
These new investment pacts should boost the two countries’ bilateral investments by 2025 to $50bn and bilateral trade to $30bn.
In the fiscal year ending March 2021, their bilateral trade totaled $8.1bn, with Indian exports to Russia at $2.6bn, while imports from Russia stood at $5.48bn, according to official data.
Focus article by Priya Jestin