International Relations

The Push for a West Coast Mega Refinery by India and Saudi Arabia

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.
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