Parameters of mega refinery: Pak-KSA technical talks in Abu Dhabi

ISLAMABAD: Pakistan and the Kingdom of Saudi Arabia are engaged at the expert level to finalise the parameters of state-of-the-art deep conversion refinery that will be announced during the forthcoming of visit of Crown Prince Mohammad Bin Salman.

In Abu Dhabi, technical-level talks are being held to finalise the parameters of the brand-new refinery to be installed by KSA. Prime Minister Shehbaz Sharif earlier visited Saudi Arabia on October 24 for a two-day visit where he took up the restoration of MoUs worth $21 billion, including the project of refinery and petrochemical complex of $10 billion earlier signed in February 2019.

However, under the new scenario, the petrochemical complex is no more part of the project. Now the refinery will only be set up with the capacity to refine 350,000 to 400,000 barrels of crude oil per day, a senior official who is part of Abu Dhabi talks told The News.

“Pakistan delegation is being headed by Musadik Masood Malik, Minister of State, and comprises secretary of petroleum, secretary of the board of investment, MD PSO, MD PARCO, and other sector officials of the Petroleum Division. The KSA is being represented by the Saudi energy minister and Saudi ARAMCO officials.”

“Both sides want to resolve all technical issues and parameters of the mega project. Saudi Aramco would be the main shareholder of the refinery to be set up in the country and in addition, there will be more stakeholders in the refinery project.”

The government has already updated the refining policy draft for the new refinery with 16 percent profitability and 20-year tax holiday and 6 years of protection duty. However, the Pakistan delegation is in talks with the KSA team with an open-ended policy, the official said. “In case, KSA asks for more incentives, then the Pakistan side would not hesitate in considering and accommodating them.” The official said that the new refinery will be able to export 35-40 percent of POL finished product and the rest will be used to cater to the country’s needs.

Saudi Aramco, he said, has already carried out its feasibility and it found that setting up a refinery in Gwadar is not feasible. However, it is feasible if it is installed either in Karachi or Hub (Balochistan), which is also near Karachi. The official said that China may also be a part of the said refinery.

The UAE government, the official said, is hesitant to set up its coastal refinery (PCR-2) at Hub and the country wants the KSA to come up with major investment in the new refinery of 350,000-400,000 BPD with more stakeholders in the project. Pakistan delegation is also in talks in Abu Dhabi with EDNOC, Abu Dhabi National Oil Company, for catering to energy needs of the country.