India and Saudi Arabia have decided to establish a joint task force to identify and rectify shortcomings in order to expedite the early implementation of India’s largest greenfield, the West Coast refinery project, also known as the Ratnagiri Refinery and Petrochemicals (RRPCL) project. This project has languished for an extended period. The decision was made during the first India-Saudi Arabia Strategic Partnership Council meeting held in New Delhi early last week, coinciding with Saudi Arabia’s Crown Prince Mohammed Bin Salman Al Saud’s state visit to India on the occasion of the Group of 20 countries (G20 Summit), which was held between September 9 and 10, 2023, under India’s chairmanship. The announcement followed a bilateral meeting between Crown Prince Salman and India’s Prime Minister Narendra Modi on the sidelines of the G20 Summit.

To expedite the implementation of the greenfield West Coast refinery project, both leaders agreed to establish a task force with representatives from both countries and initiate construction work on the project without further delay. Although the task force’s composition was not disclosed, it is expected that the framework will be developed through bilateral discussions. Officials engaged in these joint discussions are anticipated to convene shortly to commence work on the project.

Company-wise current installed crude oil refining capacities
PSU Refineries	Capacities (million metric tonnes per annum)
Indian Oil Corporation Ltd	61.7
Chennai Petroleum Corporation Ltd	10.5
Hindustan Petroleum Corporation Ltd	15.8
Bharat Petroleum Corporation Ltd	27.5
Numaligarh Refinery Ltd	3.0
Mangalore Refinery and Petrochemicals Ltd	15.0
Oil and Natural Gas Corporation Ltd	0.066
Total	141.566l
Joint ventures
Bharat Oman Refinery Ltd	7.8
HPCL Mittal Energy Ltd	11.3
Total	19.1
Private sector refineries
Reliance Industries Ltd	68.2
Naryara Energy (formerly Essar Oil)	20.0
Total	88.20
Grand total	248.856

Source: Ministry of Petroleum and Natural Gas

 

West Coast Refinery Project (WCRP)
The West Coast Refinery Project (WCRP) was originally conceived in September 2014 when three of India’s leading government-owned public sector undertakings (PSUs) in the oil and gas sector - Indian Oil Corporation Ltd (IOCL), Hindustan Petrochemical Corporation Ltd (HPCL), and Bharat Petroleum Corporation Ltd (BPCL) - joined forces to establish RRPCL also known as Ratnagiri Refinery, with equity participation in the ratio of 50:25:25. RRPCL took shape with these Indian PSUs signing an MoU in 2017.

In 2019, Saudi Aramco and Abu Dhabi National Oil Company (ADNOC) expressed their interest in partnering with a 50 percent stake in the WCRP, aiming to bring in US$35 billion of foreign direct investment (FDI) to India. The initial estimated cost of the RRPCL was Rs 300,000 crore, with a production capacity expected to reach 60 million tonnes per annum (MTPA), making it India’s first and largest integrated greenfield refinery project.

Global crude oil refinery status (million barrels per day or bpd)
Calendar year	Refinery throughput	Refining capacity
2022	81.94	101.90
2021	79.51	101.37
2020	75.92	101.79
2019	82.81	101.97
2018	83.09	100.35
2017	82.06	98.97
2016	80.61	98.69
2015	80.07	98.17
2014	77.88	97.74
2013	76.99	96.68
2012	76.60	95.42

Source: Statistical Review of World Energy, Energy Institute, London

Originally scheduled for commissioning by 2022 in the Ratnagiri district of Maharashtra, the US$44 billion project faced delays due to political interference related to land acquisition. This led to a change in location to a new site near Mumbai, and the approval process for this site is currently underway. The project’s commissioning deadline has been extended to 2025, with the estimated project cost increasing to US$70 billion.

Additionally, the project faced extensive delays due to periodic lockdowns experienced over two years between 2022 and 2021. Despite the cost overruns, which were considered temporary setbacks, the development of the WCRP remains a national priority. The commissioned plant is expected to contribute up to 2 percent of India’s gross domestic product (GDP) and 10 percent of the state of Maharashtra’s GDP. This project is also anticipated to create 150,000 jobs during the construction phase and 20,000 jobs in the operational phase. The WCRP represents a significant step forward for India’s economic and energy security, providing access to efficient and sustainable fuels as well as value-added products.

The WCRP will require a land bank of 15,000 acres, which will be developed into a massive refinery-petrochemical complex. This complex will feature three refining units, each with a capacity of 20 MTPA, collectively processing 1.2 million barrels of crude oil per day (bpd). It will also include marine storage and port facilities, three single-point moorings, a pipeline end manifold, four 48-inch submarine pipelines, small jetties, anchorage areas, a crude oil terminal and storage, blending plant, desalination plant, on-site utilities, and other facilities.

Pre-feasibility study
The public-sector Engineers India Ltd and a Mumbai-based private engineering firm, Jacob Engineering, jointly conducted the pre-feasibility study for this project. A configuration study was proposed to assess the initial cost of the project. Upon completion of the configuration study, the project was set to advance to the Front-End Engineering Design (FEED) stage, which will eventually address the technology aspect.

The WCRP presented significant opportunities for US energy companies, including consultants specializing in refinery design, and technology, as well as licensors of refinery and petrochemical technology. Consultations with manufacturers of process automation, equipment, chemicals, and catalysts could have also found ample opportunities within the WCRP. Initially, it was observed that WCRP developers were particularly interested in collaborating with foreign suppliers of niche petrochemical technology to enhance the complex’s capabilities in producing value-added petrochemical products. This approach aimed to increase the project’s profitability while reducing India’s overall dependence on imports of such products.

Downstream petrochemicals
In addition to fuels, RRPCL proposed to produce a variety of downstream petrochemicals to meet India’s rapidly growing fuel and petrochemicals needs. Both, India and Saudi Arabia have agreed to extend their full cooperation to the WCRP. In fact, the Saudi Arabian partners have already allocated funds to the tune of US$50 billion out of the total promised investment of US$100 billion for India, including funds dedicated to the refinery project.

The International Energy Agency (IEA) in its June 2023 report, stated that the fate of the planned 1.2 million bpd Ratnagiri Refinery is unclear. Land acquisition constraints represent the latest roadblock for the project, which was first proposed in 2017. Even if it is eventually approved, the IEA expects that this WCRP will not come online until 2028.


DILIP KUMAR JHA
Editor
dilip.jha@polymerupdate.com