India’s petroleum ministry has no intention to change the size or scope of a planned refining complex on the western coast of India in which Abu Dhabi National Oil Company and Saudi Aramco plan to take stakes.
"We're not going to rethink on the size of the refinery or the partners of the refinery,” Indian petroleum minister Dharmendra Pradhan told an Energy Intelligence panel on Tuesday.
“We’re confident that at a rescheduled time, we’re very much keen to develop the Ratnagiri refinery.”
The 1.2 million barrels-per-day greenfield integrated refinery and petrochemicals complex is being developed jointly by Aramco and Adnoc along with domestic refiners Indian Oil Corporation, Bharat Petroleum, and Hindustan Petroleum.
The scheme, which is currently in its land acquisition phase, is being planned in the Maharashtra state and will be supplied with 600,000 bpd of Saudi Arabian crude. The refinery plans were part of several investment pledges made during the visit of Saudi Arabia's Crown Prince Mohammed bin Salman to the UAE capital last year.
Preliminary estimations suggest the complex could cost as much as $70 billion.
Both Adnoc and Aramco will have a 50 per cent stake in the Ratnagiri project, which is expected to have a chemicals capacity of 18 million tonnes annually.
The planned downstream investment is part of an increasing interest in India’s refining sector as both majors and state-backed players look to supply crude to refinery assets in one of the few places with growing demand for the commodity.
Saudi Aramco also plans to acquire the world's current largest refinery at Jamnagar in India's western Gujarat state as the national oil company looks to secure demand for its crude.
“India has refining capacity of around 250 million metric tonnes. In next decade we want to add another minimum 100 MMT. By 2030, we must have 350 MMT refining capacity [for our demand],” Mr Pradhan told the panel.
Indian refining capacity is expected to face a shortage of around 3.5-4 million bpd in the future, according to consultancy Wood Mackenzie, with India’s state-backed refiners tasked with bridging the gap by courting billions of dollars of foreign investment.
The minister also reiterated the government’s commitment to divest from its energy sector, saying “the government has no business to be in the business”.
Asia’s third largest economy's energy future will hinge on a “hybrid solar-gas model” that is likely to be more sustainable, he added.
"India is very aggressive on solar energy. We have come down to a few cents today [in terms of tariffs]. Blending of solar energy with gas is a more hybrid model,” Mr Pradhan said.