The world-class, mixed-feed steam cracker (50% ethane and refinery off-gas) will be built next to the SATORP refinery that's 62.5% owned by Saudi Aramco and 37.5% by Total.
According to the understanding reached with the consortium of IndianOil, Hindustan Petroleum and Bharat Petroleum, Saudi Aramco will supply half - or 30 million tonnes - of crude to the refinery being built in Maharashtra's coastal district of Ratnagiri.
Fahad E Al Helal, vice president of project management, said: "Saudi Aramco continues its efforts in adopting and developing the latest technologies in geographical information systems, in addition to strengthening our relations and collaborations with associations and experts in the industry". This translates to around 10 mtpa of crude oil.
The heightened prospects of conflict between the USA and Russian Federation and also between Saudi Arabia and Iran raised the prospect of an interruption in the global supply of crude oil, which has risen since Friday by about 7%.
Oil's rally to $70 a barrel is threatening to clip India's economic wings at a time when Saudi Arabia is looking to join a $30 billion refinery project in the world's fastest growing market.
Saudi Aramco had also initially shown interest in IOC's 15 million tonnes Paradip refinery in Odisha but walked out of the project in 2006.
"The projects will have risks, the markets will have risk, but India has no risk and have told the Aramco team to assign zero political and regulatory risk to India and treat it as part of Saudi Arabia", he told reporters. "We will match that with commitment, with action and with unmatched flow of FDI", he added.
Saudi Arabia's Crown Prince Mohammed bin Salman, who was winding up a two-week visit to the United States, was present at the signing in Houston, Texas, on Saturday along with Saudi Energy Minister Khalid Al-Falih and US Energy Secretary Rick Perry. The new facility will be integrated with an existing oil refinery-itself a joint venture between Aramco and Total. The locals, mostly fishermen and farmers, have been opposing the project on the grounds that it would take away their livelihoods, disturb the ecology of the entire region, and expose the Konkan region to further industrial exploitation. He had previously pointed out that the upcoming project "is a greener refinery than the one in Chembur, Mumbai". When the government announced plans to sell about 5 percent of Aramco to raise over $100 billion, an IPO was expected by the end of this year, with possible listing list on foreign markets including New York, London and Hong Kong.
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