(Manufacturing Today)
Saudi Aramco has rekindled interest in investing in India’s plans to establish new refineries, despite facing setbacks recently. The strategic move by Bharat Petroleum Corp. and Oil and Natural Gas Corp. to build new refineries will open another opportunity for the Middle East’s largest oil producer.
Saudi Aramco has declined to comment on specific investment plans but has stated that India remains a key priority for the company. If a deal is struck, Saudi Arabia could increase its crude oil market share in India, where it was the third-largest supplier in 2024, supplying 625,000 b/d. India remains a key investment priority for the company.
Refining capacity expansion
Abhishek Ranjan, South Asia oil research lead at S&P Global Commodity Insights, said, “Any interest from Saudi Aramco in BPCL and ONGC refineries will align with this strategic direction. If they get to obtain a successful partnership in any of these new refineries, Aramco cannot only ensure a steady supply of its crude but will also gain a substantial share of refinery output for sale in the Indian retail market.”
India aims to increase its refining capacity from 258.1 million mt to 309.5 million mt by 2028, with S&P Global Commodity Insights estimating that India will require an additional 400,000 b/d of hypothetical capacity by the early 2030s.
Setbacks in the refinery project
The country has faced setbacks in its attempts to establish a mega refinery-cum-petrochemicals complex, the Ratnagiri Refinery, with an annual capacity of 60 million mt.
The project has faced numerous delays, raising questions about its success. A proposed US$15 billion sale of a 20 per cent stake in Reliance’s oil-to-chemicals business to Aramco was also called off.
Ongoing expansion
Despite these setbacks, India remains committed to increasing its refining capacity. IOC is expanding its Panipat, Paradip, Gujarat, and Barauni refineries to increase capacities and integrate petrochemical production units. BPCL is expanding its Bina refinery and increasing its crude processing capacity.
HPCL Mittal Energy has expanded its refinery capacity and integrated petrochemicals, increasing the petrochemical intensity to around 20 per cent. HPCL Rajasthan Refinery is developing a 9 million mt/year refinery and petrochemical project in Rajasthan, with a petrochemical intensity of around 26 per cent, one of the highest in India.
