Aramco still part of west coast refinery project, says Hindustan Petroleum chief
Nothing to my knowledge which says that the deal is not on, says Surana
Saudi Aramco’s decision to invest over ₹1 lakh crore to buy a 20% stake in Reliance Industries Ltd.’s (RIL) oil to chemicals business won’t derail its investment plans in the ₹4-lakh crore west coast refinery-cum-petrochemical project in Maharashtra being undertaken along with the oil public sector majors.
Confirming this, Hindustan Petroleum Corporation Limited’s (HPCL) CMD Mukesh Kumar Surana told The Hindu, “For the west coast refinery, configuration study is being conducted. Saudi Aramco and ADNOC are very much a part of the configuration study. I think Saudi Aramco has the capacity to invest in multiple projects (RIL and west coast). In other countries also, they have invested. So far, there is nothing to my knowledge which says that the deal is not on.”
Saudi Aramco and Abu Dhabi National Oil Company (ADNOC) will own about 50% stake in the Ratnagiri Refinery and Petrochemcials Ltd. (RRPCL), and the balance 50% will be owned by Indian oil marketing companies comprising Indian Oil Corporation Ltd. (IOC), Bharat Petroleum Corporation Limited (BPCL) and HPCL.
However, the location for the project is yet to be identified after the one identified earlier in Ratnagiri district of Maharashtra was abandoned due to public and political protests last year.
RRPCL is expected to process 1.2 million barrels per day of crude oil, equivalent of processing capacity of RIL’s twin refineries in Jamnagar, Gujarat. Besides, it will also produce 18 million tonnes per annum of petrochemical products.
Trigger for RIL deal?
However, some analysts view Aramco partnering RIL as an effect of the huge cost escalation in the west coast project. Besides, there is no guarantee that the project will take off at all. “We believe the key trigger for the conclusion of RIL-Aramco deal was the declining probability of the Maharashtra refinery as the cost jumped from ₹3 lakh crore to ₹4 lakh crore following delays and environment-related requirements,” said Gagan Dixit, analyst, Elara Capital.
On the crude sourcing deal, Mr. Surana said, “Saudi Aramco is the biggest source of crude supplies and most refineries get Saudi crude.
“As far as Aramco is concerned, they will be happy to have a destination for their crude on a long-term basis. Buyers will also be happy to have long-term arrangement for assured source of supply. So, to that extent, I don’t see any contradictions in the two partnerships.”
On the status of the west coast refinery project, Mr. Surana said, “The work on the refining project is ongoing. I don’t think we can give a timeline. This refinery will take five years to be completed.”
When asked if HPCL can sell stake similar to the RIL deal, Mr. Surana said, “We have got no plan to sell stake to anybody outside. In HPCL, 51% is owned by government or a government-owned company. We can’t dilute more stake or it will become a privately-owned company. We are doing well in our current avataar. There will be different requirements for a private company to monetise its stake.”
Source: The Hindu