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Saudi Aramco is in discussions with India about the possibility of participating in a number of refining projects operated by state-owned Indian oil companies, the first of which could start up in around 2020-21, Indian oil minister Dharmendra Pradhan told S&P Global Platts Tuesday.
The two projects include plans by the state-owned IOC, HPCL and BPCL to build a 60 million mt/year (over 1 million b/d) refinery in Maharashtra, along with another with a capacity of 9 million mt/year developed by HPCL in Rajasthan, Pradhan said in an interview during a visit to Tokyo.
"There are some projects [under discussion]," Pradhan said. "Saudi Aramco feels comfortable with the Indian government companies so there will be a joint venture model between Aramco and some of [them]."
Saudi Aramco said in early October that India was a priority destination for investment and that it was keen to play a bigger role as a crude and LPG supplier to feed an anticipated rise in demand.
Saudi Arabia is India's second-largest supplier of crude oil after Iraq, accounting for about 19% of its imports. It also accounts for 29% of India's LPG imports.
During fiscal 2016-17 (April-March), India imported about 39.5 million mt of crude oil from Saudi Arabia, according to the oil ministry.
"Aramco is the oil major of the world... we welcome them," said Pradhan, adding that India is "discussing with them regarding some specific projects in different aspects of the value chain."
Asked to comment on the status of negotiations with Aramco as well as its potential stake holdings, Pradhan said: "These are all business discussions," declining to elaborate further.
This will be Saudi Aramco's first foray into India's refining sector, having been shopping for refining assets in Asia as it looks for captive markets for its crude oil.
Pradhan said HPCL's 9 million mt/year Rajasthan refinery is expected to start up in around 2020-21.
He also said construction work at the mega refinery project in Maharashtra should start "by the end of the next calendar year or at least early 2019," and that the refinery could start up around 2022-23.
India, meanwhile, has stepped up its imports of US crude since the maiden arrival of a 1.6 million-barrel US crude cargo earlier this month.
Asked whether India would seek US crude on term contracts, he said it would be dependent on price.
"We will go by the market... we have some term contracts with neighboring area," Pradhan said. "We need a dynamic pricing mechanism. We are open."
INDIA-JAPAN RELATIONSHIP
During the current visit, Pradhan invited Japan Petroleum Exploration President & CEO Hideichi Okada to participate in India's methane hydrate projects and some E&P opportunities.
"Very soon India will be starting a gas hydrate project... there is natural bonding," said Pradhan, noting that it was Japex's subsidiary Japan Drilling Co. that had run India's second offshore methane hydrate expedition in 2015.
In September 2013, Japan and India signed a joint statement on bilateral energy cooperation, including on gas hydrates.
While noting India's newly opened acreage system for upstream, Pradhan said there were "some attractive points for Japex to come to India in these two areas: E&P and new area [gas hydrate], the new frontier in the oil industry."
Pradhan also said the bilateral relationship between India and Japan can be supplementary as they are both two major energy consumers.
"Japan and India have a lot of similarities," Pradhan said. "We are the two major consumers of the world. If you put us together nobody can match with us as a consumer."
Pradhan added that he will sign a memorandum of cooperation on LNG with Japan's Ministry of Economy, Trade and Industry on Wednesday aimed at promoting the bilateral relationship in the energy sector, contributing to the diversification of India's gas supplies.
https://www.platts.com/latest-news/oil/tokyo/interview-saudi-aramco-in-talks-with-india-on-27880389
- Talks relating to refinery projects in Maharashtra, Rajasthan
- First of the two refineries could start up in 2020-21
- Invites Japex to participate in India's methane hydrate sector
The two projects include plans by the state-owned IOC, HPCL and BPCL to build a 60 million mt/year (over 1 million b/d) refinery in Maharashtra, along with another with a capacity of 9 million mt/year developed by HPCL in Rajasthan, Pradhan said in an interview during a visit to Tokyo.
"There are some projects [under discussion]," Pradhan said. "Saudi Aramco feels comfortable with the Indian government companies so there will be a joint venture model between Aramco and some of [them]."
Saudi Aramco said in early October that India was a priority destination for investment and that it was keen to play a bigger role as a crude and LPG supplier to feed an anticipated rise in demand.
Saudi Arabia is India's second-largest supplier of crude oil after Iraq, accounting for about 19% of its imports. It also accounts for 29% of India's LPG imports.
During fiscal 2016-17 (April-March), India imported about 39.5 million mt of crude oil from Saudi Arabia, according to the oil ministry.
"Aramco is the oil major of the world... we welcome them," said Pradhan, adding that India is "discussing with them regarding some specific projects in different aspects of the value chain."
Asked to comment on the status of negotiations with Aramco as well as its potential stake holdings, Pradhan said: "These are all business discussions," declining to elaborate further.
This will be Saudi Aramco's first foray into India's refining sector, having been shopping for refining assets in Asia as it looks for captive markets for its crude oil.
Pradhan said HPCL's 9 million mt/year Rajasthan refinery is expected to start up in around 2020-21.
He also said construction work at the mega refinery project in Maharashtra should start "by the end of the next calendar year or at least early 2019," and that the refinery could start up around 2022-23.
India, meanwhile, has stepped up its imports of US crude since the maiden arrival of a 1.6 million-barrel US crude cargo earlier this month.
Asked whether India would seek US crude on term contracts, he said it would be dependent on price.
"We will go by the market... we have some term contracts with neighboring area," Pradhan said. "We need a dynamic pricing mechanism. We are open."
INDIA-JAPAN RELATIONSHIP
During the current visit, Pradhan invited Japan Petroleum Exploration President & CEO Hideichi Okada to participate in India's methane hydrate projects and some E&P opportunities.
"Very soon India will be starting a gas hydrate project... there is natural bonding," said Pradhan, noting that it was Japex's subsidiary Japan Drilling Co. that had run India's second offshore methane hydrate expedition in 2015.
In September 2013, Japan and India signed a joint statement on bilateral energy cooperation, including on gas hydrates.
While noting India's newly opened acreage system for upstream, Pradhan said there were "some attractive points for Japex to come to India in these two areas: E&P and new area [gas hydrate], the new frontier in the oil industry."
Pradhan also said the bilateral relationship between India and Japan can be supplementary as they are both two major energy consumers.
"Japan and India have a lot of similarities," Pradhan said. "We are the two major consumers of the world. If you put us together nobody can match with us as a consumer."
Pradhan added that he will sign a memorandum of cooperation on LNG with Japan's Ministry of Economy, Trade and Industry on Wednesday aimed at promoting the bilateral relationship in the energy sector, contributing to the diversification of India's gas supplies.
https://www.platts.com/latest-news/oil/tokyo/interview-saudi-aramco-in-talks-with-india-on-27880389
