Center considers several refineries, not one Emirati-Saudi plant

The central government is considering building several refineries instead of the one mega-refinery planned with Saudi Aramco and Abu Dhabi National Oil Co (ADNOC) because of challenges in land acquisition, three people familiar with the matter said.

Barriers to land purchases are one of the main reasons for the slow infrastructure development in the country.

aramco and ADNOC Joined a consortium of state-owned companies in 2018 to build a 1.2 million bpd coastal refinery and petrochemical plant in western Maharashtra, looking for a reliable outlet for their oil. Delays in acquiring a 15,000-acre parcel of land have all but stalled the project, originally scheduled for 2025, and boosted costs by 36% to $60 billion, according to 2019 estimates.

“There is a suggestion that we could actually have three instead of one and that’s a matter of discussion company Get involved,” one of the sources said.

Attempts to acquire the land have failed due to issues including farmers’ refusal to hand over the land, fearing the project could damage the Ratnagiri region known for Alfonso mango and cashew plantations and fishing villages.

aramco and ADNOC Each has a 25 percent stake in the joint venture Ratnagiri Refinery & Petrochemicals Ltd (RRPCL), named after the region where the refinery was originally planned. State refiners Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation hold the remaining shares in RRPCL.

“The role of the Maharashtra state government is crucial in securing land,” the source said.

Maharashtra’s industry minister did not respond to calls seeking comment. RRPCL CEO MK Surana and ADNOC There was no comment, while Aramco said last week: “We will respond as soon as possible”.

ADNOC and Aramco are aware of plans for several refineries, another source said.

“If there is no large land available, it is better to build the refinery in a different location as it will reduce the investment risk,” said the second source. “With multiple refineries, you also have the flexibility to adjust product mix according to changing product demand patterns,” the source said.