India, Saudi Aramco Shake Hands for $44Bln Mega Refinery-Petrochem Project

Saudi Aramco's Abqaiq oil facility in eastern Saudi Arabia. The firm's IPO is set to be the country's largest ever. Reuters

Saudi Aramco, the world's biggest oil producer, has signed an agreement to develop with a consortium of Indian refiners a $44 billion integrated refining and petrochemical complex as it looks to secure its market share in India.

On signing of the mega deal with India, Saudi Aramco President Amin Nasser said the company aims to go beyond its role of crude oil supplier to a "fully integrated position" whereby it could support India's future energy demands. The announcement comes less than a year after Aramco paid $2.2 billion to Royal Dutch Shell Plc to gain sole control of the Port Arthur plant and some other Motiva assets the two companies controlled as part of a joint venture.

Flynas said afterwards it had agreed with CFM to buy its LEAP engines to power an incoming fleet of 80 A320neo aircraft on order from Airbus, whose deliveries start later this year.

The refinery will be capable of processing 1.2 million barrels of crude oil per day (60 million metric tonnes per annum, or MMTPA).

Financial services company ING said the offering "is a bellwether for Saudi Arabia's push away from a heavy dependence on oil".

The announcements capped a three-week visit to Houston by Mohammed bin Salman, Saudi Arabia's crown prince, during a boom in USA oil and gas production largely driven by West Texas shale drilling. By comparison, the market value for iPhone maker Apple is about $877 billion, and the total value of shares traded on the New York Stock Exchange was more than $20 trillion as of a year ago.

"We are trying to signal to markets, to investors, to the financial community, to worldwide companies to put investments back in upstream", he said. Saudi Aramco plans to dilute its 50 per cent stake to an additional strategic partner on a later date. "We are very respectful of the regulatory environment and we would work closely with the government to ease the introduction of Saudi Aramco into the retail sectors", he said.

Aramco will hold a 50% stake in the project, he told reporters on the sidelines of the International Energy Forum in New Delhi.

In the interview Tuesday, Jadaan said the government had not yet decided whether to list Aramco on the Saudi exchange alone, on a stock market overseas or seek a dual listing.

Saudi Arabia, known as the swingmaker in Opec - the grouping of oil exporting countries accounting for roughly 40% of global supplies - till some time back but is today jostling for market share with U.S. shale industry and non-Opec players such as Russian Federation as well as fellow Opec members Iran and Iraq.

India-the world's third largest oil consumer-has been pushing for reasonable crude oil pricing from The Kingdom.

Nasser said he was not anxious by rising supplies from regional rivals to India.

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