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Saudi Aramco is poised to buy a 20% stake in a new refinery that India’s state-owned refiner Bharat Petroleum Corporation Limited (BPCL) plans to build with a total investment of about $11 billion, Indian news outlet Business Standard reports.
BPCL plans to have the refinery built at the Ramayapatnam port in the state of Andhra Pradesh on the east coast of southern India. The refinery is planned to have a processing capacity of between 180,000 and 240,000 barrels per day (bpd).
The Indian company, which is the country’s second-biggest state refiner with 706,000 bpd of crude processing capacity, plans to sell a 30–40% equity stake to outside investors. This stake would include a 20% interest to Saudi Aramco, a nearly 10% stake to Oil India Ltd (OIL), and another 4–5% equity stake to interested banks, according to a senior BPCL official who spoke to Business Standard.
Earlier this year, BPCL secured the land for the new refinery. The Andhra Pradesh government allocated 6,000 acres for the refinery and petrochemicals project, which is expected to cost about $11 billion (967 billion Indian rupees). The state government has asked BPCL to launch commercial operations at the refinery by January 2029, per the order cited by Reuters.
Currently, BPCL operates three refineries in India. The company and other Indian refiners are looking to boost their crude processing and petrochemicals capacity to meet growing demand in the world’s third-largest crude oil importer.
Saudi Arabia, for its part, looks to lock in future term sales for its crude in the top Asian markets, which are set to continue driving global demand growth in the coming years. India has even surpassed China as the single biggest driver of demand growth.
Sources in India told Reuters earlier this year that Aramco was in discussions to invest in two planned refineries in India.
Saudi Aramco is discussing buying a stake in the BPCL refining and petrochemical complex in south India, and is in separate talks with Oil and Natural Gas Corporation Limited (ONGC) for a proposed refinery in the Gujarat state on India’s west coast, the sources told Reuters.
