The Indian government has decided to relocate the country's proposed biggest oil refinery on India's west coast in what is being seen as a politically motivated move to avert election loss due to the resentment of farmers who are against the project. The name of the new location has not yet been announced.
The proposed site of Ratnagiri Refinery and Petrochemicals Ltd in the Konkan region is in an ecologically sensitive area. Farmers had launched a massive protest against land acquisition for the project, claiming that they have already witnessed a sharp fall in their produce due to mining and pollution from industries in the region.
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The move comes only a day before the visit of Mohammed Bin Salman, the crown prince of Saudi Arabia, who is directly involved in the project. Saudi Aramco has teamed up with state-owned Indian companies to build the $44 billion refinery in order to meet the country's energy needs in times of emergency. Thousands of farmers in and around the proposed site had been protesting against the refinery, contending that the chemicals may damage farm produce like the famed Alphonso mangoes, cashews and seafood, causing loss of livelihood.
"Shiv Sena presented this aspect (of local opposition) and we have accepted it. It (the project) will come up at a place where it is acceptable to people," Chief Minister of Maharashtra Devendra Fadnavis told the press while announcing the political tie-up with Shiv Sena.
The move is being considered a major setback to Saudi Arabia's plans to secure its energy sales through this refinery, given the assumption that identifying an alternative site for the huge project would be time-consuming and full of hurdles.
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Last June, UAE's state-owned oil giant ADNOC entered into an agreement with Saudi Aramco to command a 50 percent stake in the $44 billion refinery together. The project was scheduled to start operation from 2022. The refinery was also expected to provide feedstock for the integrated petrochemicals complex under construction in the vicinity, which will have the capacity to produce approximately 18 million tonnes per anum of petrochemical products.
India plans to expand its refining capacity by 77 percent to about 8.8 million barrels per day by 2030. Saudi Arabia also plans to open its own retail outlet in India, the world's third largest consumer of oil.
