HOUSTON, March 10 (Reuters) – President Donald Trump on Tuesday announced the construction of a refinery on the southern U.S. border backed by India's Reliance Industries (RELI.NS), operator of the world's biggest refining complex.

The 168,000 barrels-per-day (bpd) refinery will be built at the port of Brownsville and will offset $300 billion in the trade deficit with India, startup America First Refining said in a statement.

"Thank you to our partners in India, and their largest privately held Energy Company, Reliance, for this tremendous Investment," Trump said on social media platform Truth Social.

"For the first time in half a century, the United States will build a new refinery designed specifically for American shale oil," said America First's chairman and founder, John V. Calce.

The project is led by America First Refining. The cost of construction of refineries or additions to refineries in the past decade has averaged about $40,000 per barrel of capacity, or about $6.7 billion for 168,000 barrels.

Reliance has signed "a binding 20-year offtake term sheet" with America First, meaning it will buy products the refinery produces. That will help cut India's trade surplus with the U.S., which has been a Trump grievance.

Analysts were skeptical about the need for a new refinery on the Gulf Coast, which is already home to eight of the country's 10 largest refineries.

"Initial announcements like this by the Trump administration have a lot of hyperbole," said Refined Fuels Analytics managing director John Auers.

Gulf Coast refineries have advantages over plants elsewhere in the U.S., said Kloza Advisors principal analyst Tom Kloza. "If Brownsville is indeed the location for the build, I would assume that they are looking at an export refinery," Kloza said. "There is not much local demand and there are not pipeline connections to take Brownsville product elsewhere."

U.S. refineries are the major suppliers of motor fuel and heating oil to South America, Kloza said, and have lower costs for natural gas, hydrogen and domestic crude oil.

"Let's see what develops," he said. "Reliance is a very successful company."

Trump named the investor as Reliance, India's largest private-sector company.

Reliance operates the 1.4 million bpd refining complex in Jamnagar, India, the world's largest. The firm, which reported $125 billion in revenue last year, also operates businesses in retail, new energy, digital services, media and entertainment.

America First said it plans to break ground in the second quarter of this year.

Reporting by Erwin Seba, Nicole Jao, Arathy Somasekhar Kanishka Singh, Jasper Ward and Timothy Gardner; Additional reporting by Nidhi Verma in New Delhi; Editing by Costas Pitas, Stephen Coates and Christopher Cushing