India-Saudi Arabia tie-up planned in oil refinery project

By agencies   |   Thursday, 31 March 2005, 08:00 Hrs
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NEW DELHI: India may collaborate with Saudi Aramco in setting up a 20 million ton per annum grassroots refinery in Saudi Arabia. In return, the Saudi Government has agreed in principle for investment in Indian refineries.

Preliminary talks have been held during the Petroleum Minister Mani Shankar Aiyar's current visit to that country.

Aiyar said Saudi Arabia had also assured that it would continue to meet India's full crude oil requirements over the next two decades. Though the system of annual term contracts would continue, the Saudi authorities said these would remain evergreen despite sharp increase in demand expected from India.

He said imports were expected to double from 24 million ton annually to about 50 million ton after 20 years, but Saudi Arabia assured that it would meet the country's full requirements.

As for the proposed refinery project at Yanbu, Aiyar said discussions would now take place to finalize the modalities for the collaboration. It would be an export-oriented refinery with some of the production earmarked to meet India's demand and the balance for supplying to other global markets.

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