MC EXCLUSIVE Jamnagar district likely to get ONGC’s latest refinery; Saudi Arabia to supply crude oil

Representative image

The greenfield refinery by state-run Oil and Natural Gas Corporation Limited (ONGC) is likely to be set up in Gujarat’s coastal Jamnagar district, a senior government official told Moneycontrol.

ONGC is also parallelly in talks with Saudi Arabia to work the details of setting up a joint venture company to establish the plant, the official said, adding the Gulf country might also supply crude oil for the refinery.

“This will be a coastal refinery. The refinery is most likely to be set up in Gujarat’s Jamnagar district; it will be around that belt. Dharuka (in Gujarat) is also being looked at,” the official said.

ONGC is currently working on the detailed feasibility report (DFR), after which the final capacity of the refinery and investment required for the project would be finalised, the official said.

Queries sent to ONGC remain unanswered at the time of publishing.

As Prime Minister Narendra Modi visited Saudi Arabia in April 2025, the two countries had decided to collaborate on energy projects, specifically in the refining and petrochemicals sectors. According to a joint statement by India and Saudi during Modi’s visit, the countries announced working on establishing two refineries in India.

The other refinery is being set up by the state-run Bharat Petroleum Corporation Limited (BPCL) in Andhra Pradesh’s Nellore district.

Moneycontrol had reported in February that BPCL was in talks with Saudi Arabia for a crude oil deal for the company’s upcoming refinery in Andhra Pradesh. The company will enter into a long-term deal of 15-20 years for supply of crude oil for the new refinery, if Saudi Arabia agrees to provide “good discounts” on purchase of oil for the refinery. It is also willing to dilute a 20-25 percent stake in the new refinery and forming a joint venture with the country. Talks are still underway.

India and Saudi Arabia are important energy partners.

In 2019, Saudi Arabia had signed a memorandum of understanding (MoU) with India and announced a plan to invest $100 billion in the country in sectors such as agriculture, infrastructure, manufacturing and energy. The investment plan, however, has not materialised yet.

The recent investment proposals by Riyadh in India’s upcoming refinery projects are seen as a part of Saudi’s earlier plans.

India is a huge market for Saudi Arabia’s crude oil, as New Delhi buys a significant portion of its oil requirements from Riyadh. Saudi—India’s traditional crude oil partner—is currently the third-largest oil supplier to New Delhi, after Russia and Iran.

As crude oil prices soften due to dampening global demand, Saudi Arabia is looking at oil deals to build itself a market and ramp up oil exports. Contrary to global trend, India’s oil demand remains strong and is expected to grow in the coming years.

According to the International Energy Agency (IEA), India will lead global oil demand by a large margin, adding a steep 1 million barrels per day (bpd) by 2030 on the back of economic expansion. India's demand for crude oil is expected to rise from 5.64 million bpd in 2024 to 6.66 million bpd in 2030, said IEA.

India—which is the fourth largest refiner in the world—has been working towards further increasing its refining capacity as the country’s fuel demand remains robust.

The Indian government’s initial plan was to set up a 60 mmtpa refinery in Maharashtra’s Ratnagiri, which later had to be shelved due to land acquisition issues.

After the state-run Oil Marketing Companies (OMCs) failed to set up the said plant, India’s oil minister Hardeep Singh Puri said that the companies would instead build smaller refineries of 20-25 mmtpa capacity, to avoid land acquisition issues.

As India aims to increase its refining capacity to 450 mmtpa by 2030 from around 250 mmtpa currently, the government has been focused on commissioning new oil refineries while also expanding the capacity of existing ones.

(Disclosure: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.)