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India's Adani Group has announced that it has signed an exclusive joint venture agreement with leading physical supplier Chemoil.

The agreement will enable the joint venture company, Chemoil-Adani Private Limited to begin supplying marine fuel at Mundra port in what Adani says is its first step to expanding its presence throughout the Pan-Indian fuel oil and petroleum product markets.

Mundra Port is the largest private port in India and is located west of Kandla Port in the Gulf of Kutch, in the western Indian state of Gujarat.

Strategically positioned near the main shipping routes of Asia, the Middle East, Europe and Africa, joint venture partner Adani says it is the ideal location for the newly-formed company's launch. It also plans to expand its operations to other Indian ports in the future.

Commenting on the joint venture agreement, Clyde Michael Bandy, Chemoil Chairman said “This venture is a significant opportunity for Chemoil to make an early strategic entry into India’s promising marine fuel market.

"By teaming up with an established player and building a strong presence in the region, Chemoil is well-positioned to realize our vision of being a key player in the development of the Pan-Indian fuel oil and petroleum product markets.

"As the first international marine fuel supplier to seriously approach the Indian market, we are delighted to have found such a strong partner in the Adani Group, who have been pivotal in developing Mundra as India’s most advanced port and have unrivalled regional knowledge and networks, that will be huge assets to the venture.”

Bandy continued: “Mundra is well-situated for supplying the rising number of vessels of all types that call in the Gulf of Kutch. This joint venture creates additional synergies with Chemoil’s existing businesses in Fujairah and Singapore and further demonstrates the entrepreneurial flair combined with the adaptability and strong commercial thinking that is synonymous with Chemoil.”

The joint venture company will be 50:50 owned by Chemoil and the Adani Group with equal representation on the Board. The firm will receive an initial investment of up to US$10 million, which can be increased as the business requires, Adani said in a statement.

The company will lease storage terminal facilities from the Mundra Port Special Economic Zone. The port is currently implementing a robust infrastructure upgrading program to expand its capacity and efficiencies, which Adani says will enable the joint venture to exert tighter control on operations, manage costs and ensure reliable fuel delivery. Operations will be supported initially by barges owned by the Adani Group.

Gautam S Adani, Chairman of the Adani Group, added “As the Port of Mundra continues to position itself as a leading maritime center both in the State of Gujarat and in the international arena, we are tireless in our commitment to developing management, technology and infrastructural expertise to support rapidly increasing trade.

"Identifying new opportunities to develop service offerings and operational capabilities is a key part of creating a world-class port. With over 27 years’ experience in the marine fuels market, Chemoil brings strong brand recognition, global industry market know-how and operational expertise. By combining our competencies, we look forward to building a business that will facilitate mutual growth to fulfill our ambitions and realize vast untapped potential in India.”