RELIANCE Industries has agreed to sell a 20% stake – worth US$15bn – in its refining and petrochemicals business to Saudi Aramco.
The two companies have signed a non-binding letter of intent for the Saudi state oil giant to take a stake in the Indian firm’s Oil to Chemicals division, which includes its refining, petrochemicals and fuel marketing businesses.
The deal would also establish a long-term agreement for Saudi Aramco to supply 500,000 bbl/d of crude for Reliance Industries to process at its world-scale 1.24m bbl/d Jamnagar refining complex at Gujarat on India’s west coast.
Reliance Industries Chairman Mukesh Ambani said: “I am truly delighted to welcome Saudi Aramco, one of the largest business enterprises in the world, as a potential investor in our Oil to Chemicals division. We have a long-standing crude oil relationship with Saudi Aramco and we would be happy to see this further strengthened with this investment.”
The deal comes as Reliance Industries’ parent company seeks to reduce debt while the effects of trade wars, sanctions on Iranian oil and increasing Chinese processing capacity loom over refiners. For Saudi Aramco, the deal is part of an ongoing push to diversify downstream and secure foreign customers for its crude including stakes in Zeijang Petrochemical’s refining and petrochemicals complex at Zhoushan, China and Petronas’ RAPID refining and petrochemicals complex in Malaysia.
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