India expects to increase refinery capacity during the next five years thus Saudi Aramco has initiated talks to invest in Indian oil and gas refineries to secure supply stability.

Saudi Aramco engages in investment negotiations with two upcoming Indian refineries so the company can secure reliable markets for crude shipments. The third-biggest oil-consuming nation worldwide seeks to establish its position as a global refining center to meet changing market needs of cleaner fuels.

The oil giant Aramco seeks to invest in projects at Bharat Petroleum Corp’s upcoming refinery in Andhra Pradesh and Oil and Natural Gas Corp’s facility under construction in Gujarat. The refinery projects are anticipated to move ahead regardless of Aramco joining in either capacity source said.

The Saudi oil giant wants to provide oil that exceeds its stake in each project by a factor of three which creates issues regarding procurement flexibility for Indian refiners. India has decreased its dependence on Saudi oil while its refineries expand their oil acquisition to less expensive Russian suppliers.

According to expectations Indian Prime Minister Narendra Modi will travel to Saudi Arabia during the second quarter to finalize agreements before the timeframe. Previous discussions between Aramco and Reliance Industries about an investment in the refinery business failed when valuation assessments did not match up.

India’s Oil & Gas industry will experience significant expansion because plans have been made to construct three refineries which will process 400,000 barrels of oil per day during operation.