NEW DELHI, Oct 11 (Reuters) – India needs Saudi Arabia’s Aramco to take part in its deliberate 6.5 million metric tons (MMT) strategic petroleum reserve (SPR) programme because the South Asian nation needs to strengthen ties with its key oil provider, in response to a doc seen by Reuters.

The two nations have been speaking about Aramco’s participation within the SPR programme for years. The talks, nonetheless, gained traction after Crown Prince Mohammed Bin Salman’s assembly with Prime Minister Narendra Modi final month.

“Under Phase II Strategic Petroleum Reserves Programme construction of two new commercial-cum-strategic petroleum reserves of 6.5 MMT have been approved,” the Indian authorities mentioned in an inner doc, including that “Saudi Arabia’s Aramco can be invited to participate in the Phase II.”

Aramco declined to remark, whereas the Saudi authorities didn’t reply to emails searching for remark.

India’s prime ministers workplace, oil ministry and finance ministry didn’t reply both.

In 2021, India overhauled its SPR coverage permitting business sale of the crude to spice up personal participation within the constructing of latest storage services, mirroring a mannequin adopted by nations resembling Japan and South Korea.

India, the world’s third-biggest oil importer and shopper, imports over 80% of its oil wants and has constructed strategic storage at three areas in southern India to retailer over 5 million tons of oil to guard towards provide disruption.

Abu Dhabi National Oil Co (ADNOC) has leased 750,000 tons of oil storage within the 1.5 million ton SPR within the southern metropolis of Mangaluru.

India has performed two street exhibits for the second part of its SPR programme that obtained curiosity from corporations together with Trafigura, British Petroleum (BP.L), Petrochina (601857.SS), Hyundai, Gulf Energy (GULF.BK), Glencore and Shell (SHEL.L), a authorities assertion mentioned.

Regarding a possible deal between India and Saudi Aramco (2222.SE), KPMG Partner Anish De commented: “Getting the investment there will align the economic and political interest. There is good economic and political reasons for the two countries to do it.”

During the go to by the crown prince to India, Saudi Arabia introduced plans for an funding facilitation workplace in India’s Gujarat International Finance Tec-City, a tax-neutral monetary service centre.

India can also be scouting for land to construct a 1.2 million metric tonnes per yr refinery and petrochemical venture in western India with participation of Saudi Aramco and ADNOC.

The two governments will kind a job drive to take away hurdles like land acquisition, which has delayed the venture, which was conceived in 2018. Saudi Arabia has dedicated $50 billion funding for the venture.

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