India and Saudi Arabia have redoubled their attempts to expedite the long-stalled 60-million-tonne-per-annum (60 mtpa) west coast megarefinery project, which has experienced numerous setbacks.
Project for a West Coast Mega Refinery
- The ambitious concept to construct a giant oil refinery and petrochemicals plant in Maharashtra’s Konkan area, with Saudi Arabia and the UAE as partners, was first proposed in 2015.
- The project is to be developed in the village of Barsu in the Maharashtra district of Ratnagiri.
- To carry out the project, IOC, BPCL, and HPCL had already formed a joint venture (JV) called Ratnagiri Refinery & Petrochemicals (RRPCL).
- Locals were opposed because of environmental concerns and altering political balances in the state.
- Despite initial agreements and cost estimates of Rs 3 lakh crore, the project did not get off the ground since international investors did not acquire ownership in the joint venture.
Recent Happenings
- The project required the acquisition of around 15,000 acres of property spread across 17 communities in the vicinity.
- The project’s development will be tracked by a joint monitoring committee, signalling renewed commitment.
- India and Saudi Arabia are both eager to put the $50 billion project into action.
The Importance of the Project
- India is a large crude oil consumer, and its demand for petroleum products and petrochemicals is likely to rise significantly.
- India intends to raise its refining capacity from 250 mtpa to 450 mtpa, establishing it as a major player in the global oil demand scenario.
- The project provides diversification, global expansion, risk mitigation, and access to a key oil market for Aramco and ADNOC.
Options for the Future
- Scouting for alternate seaside sites in Maharashtra or considering another coastal state are realistic possibilities.
- A more radical option would be to divide the projected megarefinery into smaller units.
Source: https://indianexpress.com/article/explained/explained-economics/india-saudi-arabia-mega-refinery-project-explained-8940807/