* Deal will be worth around $15 bln for Reliance
* Will include Reliance's refining, petchem and fuel retail ops
* Co will source up to 500,000 bpd of crude from Saudi Aramco
* Reliance will get access to Saudi Aramco's chemicals tech (Recasts, adds details on deal, and background)
By Promit Mukherjee and Alexandra Ulmer
MUMBAI, Aug 12 (Reuters) - India's Reliance Industries is set to sell a 20% stake in its oil to chemicals business to Saudi Aramco, helping the Indian conglomerate to cut debt and giving Aramco better access to a fast growing market.
While terms of the deal are yet to be finalised, Reliance will get roughly $15 billion, including some debt adjustments for the 20% stake, P.M.S. Prasad, Executive Director of Reliance Industries said on Monday, adding the two companies aim to close the deal by March 2020.
The deal will see Reliance buy up to 500,000 barrels a day of crude oil from Aramco, Prasad told media after the company's annual general meeting (AGM), noting this would more than double the volumes that Reliance currently purchases from Aramco.
The deal ties in with Aramco's push to expand its refining and marketing footprint globally by signing new deals and boosting the capacity of its plants to secure new markets for its crude oil.
Aramco is boosting its refining and petrochemicals business, particularly in Asia, and sees growth in chemicals as central to its downstream expansion strategy to reduce risk as oil demand slows.
"This signifies perfect synergy between the world's largest oil producer and the world's largest integrated refinery and petrochemicals complex," said Reliance Chairman Mukesh Ambani, while announcing the deal at the AGM in Mumbai on Monday.
Ambani, who is Asia's richest man, said the deal would be the biggest foreign investment in the history of Reliance and also one of the largest foreign investments ever in India.
Aramco declined to comment on the Reliance tie-up on Monday which coincided with its announcement of a 12% decline in half-year net profit.
Last month, Saudi Arabia's Energy Minister Khalid al-Falih told Reuters that he was 'optimistic' that a deal between the two companies would work out.
The joint venture with Aramco will cover all of Reliance's refining and petrochemical assets, along with its 51% stake in its petroleum retail joint venture.
Last week, global oil major BP said it was forging a fuel retailing joint venture with Reliance to cash in on rising demand in Asia's third-biggest economy. Reliance is set to own a 51% stake in the venture.
The deal will help Reliance source technology for converting more fuel into chemicals, a process spearheaded by Saudi Aramco, Gagan Dixit, a senior analyst with Elara Capital told Reuters.
One source told Reuters on Monday that Aramco will also have an option to supply non-Saudi oil under the deal.
The deal with Aramco potentially opens up new crude sourcing avenues for Reliance and helps it better hedge against any kind of supply disruption due to geopolitical tensions. Reliance has historically bought substantial volumes of oil from Venezuela and Iran, which both currently face U.S. sanctions.
The Aramco deal is the latest in a series of moves by Reliance to sell non-core assets, or forge joint ventures, as it seeks to reduce debt that stood at 2,882.43 billion rupees ($41.8 billion), as of June 30.
Ahead of the BP deal, Reliance last month announced the sale of the tower assets it owns through an investment trust to Canada's Brookfield Asset Management for 250 billion rupees.
Sources this month also told Reuters that Reliance is in talks with U.S. e-commerce giant Amazon.com Inc to sell a stake in its retail venture.
"The deal with Aramco along with Reliance's own earnings from refining and petrochemical operations will help the company reduce net debt to zero in two years," said Dixit of Elara.
Ambani himself laid out a more aggressive timetable, saying on Monday that the company has a very clear roadmap to becoming a zero net debt company within the next 18 months. (Reporting by Promit Mukherjee and Alexandra Ulmer; Writing by Euan Rocha and Abhirup Roy; Editing by Sonali Paul, Stephen Coates and Keith Weir)