India’s three oil marketing companies have today signed an agreement with  Saudi Aramco, the world’s largest producer of crude oil, to set up a USD 44-billion oil refinery in Maharashtra. Saudi Aramco will buy 50 per cent stake in the mega oil refinery project in Maharashtra, while the remaining 50 per cent stake will be held by the three state-owned oil marketing companies.

During the 16th International Energy Forum (IEF) three state-owned companies- Indian Oil Corportaion (IOC), Bharat Petroleum Corporatiomn (BPCL) and Hindustan Petroleum Corporation(HPCL) signed the Memorandum of Understanding (MoU). The deal was signed in the presence of India’s oil minister Dharmendra Pradhan and Khalid al-Falih, Saudi Arabia’s Minister of Energy, Industry and Mineral Resources.

Saudi Oil Minister, Khalid A. Al-Falih, said India is a priority destination for Saudi investment and Aramco will continue to scout for opportunities beyond the west coast refinery.

Falih was quoted as saying in a newspaper, “Mr Pradhan and myself have been entrusted by our leaders King Salman and PM Modi to increase co-operation between the two countries on energy security. This is the first step in that direction. The project will have Saudi Aramco as a 50 per cent equity partner and the rest 50 per cent will be held by the Indian consortium.”

Amin H Nasser, Aramco’s President and Chief Executive Officer (CEO) said, “The company expects the refinery to be operational before 2025.”

The 50 per cent of the crude requirement of the project will be met by Saudi Arabia. Falih said state-owned Saudi Aramco can bring in another strategic partner as an international company has already shown interest in having a partnership with the company on the project. He expects the project cost of $44 billion to come down in future as financial credit rating of Aramco is very good.

Saudi Arabia will supply half of the 60 million tonne capacity, he said.

With Inputs From PTI