Mega Deal: Modi to finalize Rs 3 lakh crore refinery project in Saudi visit

India and Saudi Arabia are expected to finalise major deals in the energy sector including the West Coast Refinery Project and the Indian Strategic Petroleum Reserve (SPR) Programme.

New Delhi: India and Saudi Arabia will be seeking to finalise major deals in the energy sector, including the West Coast Refinery Project and for India's Strategic Petroleum Reserve (SPR) Programme, during Prime Minister Narendra Modi's upcoming official visit to Riyadh on October 28-29.

Modi, who is visiting Saudi Arabia on the invite of King Salman Bin Abdulaziz Al Saud, will attend the Future Investment Initiative (FII) summit on October 29, and deliver the keynote address at the third session.

He will also hold bilateral talks with the King and Crown Prince Mohammad bin Salman.

Both sides are expected to finalise the West Coast Refinery Project, a $44 billion project in Maharashtra, in which Saudi Aramco is to hold a considerable stake.

Global majors Saudi Aramco and Abu Dhabi National Oil Company (Adnoc) had formed a joint venture with Indian state-run oil marketing companies - Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) - to hold 50 per cent stake in the Ratnagiri Refinery and Petrochemicals Corp Ltd (RRPCL), known as the West Coast refinery project.

This mega-deal comes on the heels of the deal announced in August this year between Reliance and Saudi Aramco, according to which RIL would sell 20 per cent stake in its refining and petrochemicals business to Aramco for $15 billion. According to the terms of the deal, Saudi Aramco will supply 500,000 barrels per day of crude oil to RIL's twin refineries in Jamnagar.

A deal is also likely on the Indian Strategic Petroleum Reserve (SPR) Programme - three massive underground storage facilities that India is building to ensure energy security.

The proposal had been discussed during Crown Prince Mohammad bin Salman's visit to India in February this year.

According to the SPR programme, the government is to set up 5 million metric tons (MMT) of strategic crude oil storages at three locations - Visakhapatnam, Mangaluru and Padur (near Udupi) - which would be in addition to the existing storages of crude oil and petroleum products. The storage facilities would act as a cushion during any external supply disruptions.

Both sides will also firm up the first Indo-Saudi Strategic Partnership Council during the visit.

T.S.Trimurti, Secretary, East, in the Ministry of External Affairs, said that Indian Oil Corporation will sign an agreement to set up retail outlets in Saudi Arabia.

Deepening their defence cooperation, the two sides will hold their first joint naval exercises in December this year. Officials of the defence industries of both sides have visited each other's countries.

Both sides will also be looking toward enhancing cooperation in renewable energy, he said.

Modi will launch the RuPay card during his visit, which will also be useful for the Haj pilgrims, he added.

Saudi Arabia is the third country in the Gulf region to get the RuPay card facility after the UAE and Bahrain. The kingdom hosts a 2.6 million-strong Indian community, who send back $11 billion in remittances annually, he said.

It has also shown "understanding" on India's decision to revoke special status of Kashmir.