New Delhi, April 10: Hindustan Petroleum Corporation Ltd (HPCL) has drawn up plans to double the capacity of its Vizag refinery from 7.5 million tonnes to 15 million tonnes if Saudi Aramco picks up a stake in the venture.

HPCL chairman M. B. Lal said the proposal was presented to Saudi Aramco during petroleum minister Mani Shankar Aiyar?s recent visit to Riyadh.

However, Saudi Aramco is also weighing the option of investing in IOC?s 12-million-tonne grassroots refinery that is coming up at Paradip.

A senior petroleum ministry official said, Saudi Aramco could invest in either or both the projects. Detailed proposals for both the projects have been presented to Saudi Aramco and the talks will resume in Dubai on April 7.

Both refineries are on the east coast and will open up markets in the eastern and far eastern countries for selling value-added petroleum products.

HPCL has offered to make reciprocal investment in the Yanbu refinery on the Red Sea coast in Saudi Arabia. A senior official said HPCL could pick up anywhere between 26 per cent and 50 per cent stake in the refinery depending on the way the negotiations work out.

Such a stake will enable HPCL to have a say in the management of the company. A smaller stake will reduce the Indian company into making a mere portfolio investment in the overseas refinery. Since Indian companies have sufficient management experience in the downstream refining and marketing business, they are in a position to make a useful contribution to the refinery.

Besides, highly skilled and relatively cheap workforce could also be sourced from the Indian hydrocarbon sector to run the refinery.

The refinery is envisaged to become a major exporter to the western markets. It will also enable Saudi Arabia to move up the hydrocarbon value chain and raise the share of petroleum products in its export basket vis-?-vis crude oil.

According to Aiyar?s vision plan, these reciprocal investments between the Saudi Arabian and Indian companies would lead to assured supplies of crude from Saudi Arabia. The Gulf kingdom is India?s largest supplier of crude, accounting for as much as 26 per cent of total imports. While around 25 million tonnes of crude was being imported from Saudi Arabia at present, Aiyar has obtained an assurance that this could be increased to 50 million tonnes in the next 10 years if the need arises.

Indian Oil will also hold talks with Saudi Aramco to explore the possibility of setting up commercial storage facilities on a joint venture basis in India. The proposal was mooted earlier but Saudi Arabia did not evince sufficient interest at the time.