Saudi Aramco and a consortium of Indian state refiners agreed to build a mega refinery and petrochemical project on India's west coast for an estimated $44 billion, oil officials at the signing of an initial agreement said on Wednesday.
Top executives of Saudi Aramco and Ratnagiri Refinery & Petrochemicals (RRPL) - a joint venture of Indian Oil Corp, Hindustan Petroleum Corp and Bharat Petroleum Corp - signed a memorandum of understanding to take equal stakes in the project in Maharashtra state.
The project includes a 1.2 million-barrel-per-day (bpd) refinery integrated with petrochemical facilities with a total capacity of 18 million tonnes per year, the officials said on the sidelines of the International Energy Forum.
The plant will be one of the largest refining and petrochemical complexes in the world, built to meet fast-growing fuel and petrochemicals demand in India and elsewhere, and providing a steady outlet for Saudi crude oil, they said.
"Large as this project may be, it does not by itself satisfy our desire to invest in India ... We seeIndia as a priority for investments and for our crude supplies," Saudi Arabia Energy Minister Khalid al-Falih said.
"We're very much interested in retail ... We want to be consumer facing," he said.
Saudi Aramco will supply at least 50 percent of the crude to be processed at the planned refinery, officials said.
Aramco may introduce at a later stage another strategic partner to share its 50 percent stake, Falih said.
Saudi's petrochemical company SABIC is also keen to invest in a cracker and other facilities inIndia, he said.
Aramco, like other major producers, wants to tap rising demand growth and invest in the world's third-biggest oil consumer. Last year it opened an office in New Delhi.
India outlined plans in February to expand its refining capacity by 77 percent to about 8.8 million bpd by 2030.
The signing confirmed a Reuters story that ran earlier on Wednesday after representatives of Aramco held a marathon meeting with their Indian counterparts on Tuesday.
Saudi Aramco, the world's biggest oil exporter, is moving to invest in refineries overseas to help lock in demand for its crude, and expand its market share ahead of an initial public offering that is expected later this or next year.
During a visit to New Delhi in February, Falih had said Saudi Arabia would sign oil supply deals as part of any agreements to buy stakes in Indian refineries, a strategy it has adopted to expand its market share in Asia and fend off rivals.
Last year, Saudi Arabia pledged billions of dollars of investments in refinery projects in Indonesia and Malaysia that came with long-term crude oil supply deals.
Saudi Arabia is competing with Iraq to be India's top oil supplier. Iraq displaced Saudi Arabia for the first time on an annual basis in 2017, data compiled by Reuters showed.