Saudi Aramco is likely to replace steel tycoon L N Mittal's Mittal Energy as the new partner for the Rs50,000 crore refinery-cum-petrochemicals project at Visakhapatnam.

Aramco has shown interest in the proposed refinery project at Vizakhapatnam, which was originally planned as a five-way joint venture involving Hindustan Petroleum Corporation, France's Total SA, Mittal Energy, Oil India and GAIL (India), Arun Balakrishnan, chairman of HPCL, said.

The project will house a 15-million-tonne-per-year refinery and a petrochemicals unit, he said.

"Mittals have said that they want to pause their investment in the project at the moment due to the current economic meltdown, and has asked us to go ahead with the project," Balakrishnan said.

HPCL and Mittal Energy have set up another joint venture for setting up a 9 million tonne refinery in Batinda, in Punjab and Balakrishnan said Mittal Energy will continue with its investments in the project, which is planned for completion in early 2011.

Balakrishnan said while there has been no discussion on the issue so far, HPCL hopes to offer up to 15 per cent in the joint venture to the new partner.

Since the refinery will be in the private sector, the share of public sector companies will be below 50 per cent, and the equity structure is likely to be changed, Balakrishnan said.

He said Total was very keen on joining the Vizag refinery project and HPCL planned to take a re-look at the project sometime in March.

Much will depend on the emerging scenario, Balakrishnan said, adding a clear picture on the global economic situation would emerge in the next few months and a final decision on the project is likely by March next.

As things stand, demand for petrochemicals has slowed down, amidst a slump in the automobile and real estate sectors and the feasibility study too is being done all over again.

The Vizag refinery will initially be export-oriented, but could supply some products to the domestic market in the long run, he said.