Dialogue is on with Saudi Arabia. The West Asian country's state-run energy company Saudi Aramco had earlier agreed to partner in the west coast refinery in Maharashtra but the plan has not taken off yet.
The people cited earlier said that last month, petroleum secretary Pankaj Jain and executives from ONGC and BPCL met Aramco's chief executive officer Amin Nasser, and president, downstream, Mohammed Al Qahtani, in Dahran, Aramco's headquarters.
ONGC and BPCL separately plan to set up a 12 mmtpa (million metric tonnes per annum) oil refinery each, costing between INR 70,000 crore and INR 1 lakh crore. While BPCL has chosen Andhra Pradesh for its refinery, ONGC could pick Gujarat or Prayagraj in Uttar Pradesh. This would make it the first time that ONGC, an oil explorer, is setting up a refinery. Engineers India is working on a pre-feasibility study for the companies.
"The government wants state-run energy companies to set up refineries in three locations - Andhra Pradesh, Uttar Pradesh, and Gujarat. Since the investment will be humungous - to the tune of around INR 1 lakh crore each - companies will necessarily need an international partner," said an official aware of the discussions.
The west coast refinery, or the Ratnagiri Refinery & Petrochemicals (RRPCL), was proposed to be a joint venture comprising Saudi Aramco, Abu Dhabi National Oil Company (Adnoc), and state-owned oil marketing companies - Indian Oil Corporation, Hindustan Petroleum Corporation, and BPCL. Saudi Aramco and Adnoc were to jointly own 50% of the refinery, with the remaining 50% being owned by the three OMCs. It was to be commissioned by 2022, but due to delays in land acquisition, the project has not taken off.
RRPCL was designed to meet India's fast-growing fuels and petrochemicals demand, and on completion, would have been ranked among the world's largest refining and petrochemical projects. The project cost was estimated at about INR 3 lakh crore in 2018.
"A similar arrangement to that of RRPCL could also be followed with the new refineries of ONGC and BPCL. Discussions are still fluid," said an official.
BPCL, ONGC, and Saudi Aramco did not respond to email queries till the time of going to press on Sunday.
Last week, Bloomberg had reported that Saudi Aramco and its unit, Sabic, shelved a plan to build a 400,000 barrel-a-day refinery and chemicals project in the kingdom and are reviewing three other projects. This move reflects Aramco's strategic pivot towards Asia. Saudi Arabia has committed to invest approximately $100 billion in diverse sectors of the Indian economy.
In February, Fahad Al Dhubaib, Saudi Aramco's senior vice president of strategy and market analysis, had told ET that Aramco is looking into investments in refining hydrocarbons, into essential chemicals and materials.
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