Saudi Aramco and Abu Dhabi National Oil Company (ADNOC) will build a new $44 billion mega refinery and petrochemicals complex in India's western port city of Ratnagiri, the companies announced Monday.
The state-owned companies signed a framework agreement and memorandum of understanding with an Indian consortium to jointly develop the Ratnagiri Refinery and Petrochemicals Limited (RRPCL), with an expected production capacity of 1.2 million barrels per day, Saudi Aramco said in a statement.
Ratnagiri is situated 346 kilometers (215 miles) south of Mumbai.
In accordance with the agreement, Saudi Aramco and ADNOC will jointly build, own and operate the complex in collaboration with a consortium of Indian national oil companies currently consisting of Indian Oil Corporation (IOCl), Bharat Petroleum Corporation (BPCL), and Hindustan Petroleum Corporation (HPCL).
According to the statement, Saudi Aramco and ADNOC will jointly own 50 percent of the new joint venture, with the remaining 50 percent owned by the Indian consortium.
Saudi Aramco CEO Amin H. Nasser said the partnership with ADNOC and RRPCL would "help ensure that the world's fastest-growing economy has secure, reliable energy feedstocks for its long-term prosperity".
"The Ratnagiri project will meet India's rising demand for fuels and chemical products while serving the strategic objectives of the partners," he added.
A pre-feasibility study to determine the project's overall configuration will now be jointly executed by the parties, the company said.
Sultan Ahmed Al Jaber, UAE minister of state and ADNOC Group CEO, underlined the importance of the agreement.
"By investing in this project, we will both secure off-take of our crude to a key market for ADNOC, as well as strengthen access in one of the world's largest and fastest growing refining and petrochemical markets," he said.
India's minister of petroleum and natural gas, Shri Dharmendra Pradhan, also praised the agreement, saying "it will make the UAE and Saudi Arabia partners in India's rapidly growing refining sector and in India's growth story".
By Huseyin Erdogan