Clause added to fuel sale agreement for GCC-India refinery

19 August 2018
Gulf oil giants will have to first offer products from western Indian refinery to local firms before being able to export

Gulf energy giants Saudi Aramco and Abu Dhabi National Oil Company (Adnoc) will have to offer refined products from the planned Maharashtra refinery to local partners before exporting to international markets.

"They are free to market their share but they cannot export without first offering it to us," Sanjiv Singh, chairman of state-owned Indian Oil Corporation (IOC), has been quoted as saying in a local media report.

"We want to protect our market and meet domestic requirements first. So we will have first right of refusal and only when it is waived can they export fuel," he said.

According to Singh, a clause has been inserted in the shareholding agreements requiring international partners to give priority to Indian refiners to help meet local demand.

IOC is leading the consortium of Indian refiners in the project, owning 25 per cent of the stake, while Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited will split the remaining stake equally among themselves.

Aramco and Adnoc now hold a combined 50 per cent stake in the $44bn-worth downstream complex proposed to be built near Ratnagiri, along India’s western coastline. This after Aramco, which initially purchased half the stake in the proposed project in April, diluted a portion of its stake to Adnoc in June.

The Arabian Sea coast megaproject will comprise a 60 million tonne a year (t/y) refinery to be integrated with a petrochemicals facility that will produce 18 million t/y of derivative products, when ready by 2025.

Aramco and Adnoc will supply half of the crude oil required for processing at the refinery.

ALSO READ: Why the integrated complex is the future

A MEED Subscription...

Subscribe or upgrade your current package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications