Govt seeks input on UAE’s SPM proposal

KARACHI: The government has sought input from the oil, gas and related ministries and departments on a proposal to develop and construct oil handling and storage infrastructure in view of a scheduled visit of the Emir of Qatar.

The Ministry of Energy (Petroleum Division) has asked for inputs on the construction of oil handling and storage infrastructure, including a single point mooring (SPM) loading and offloading buoy at Hub Balochistan, an oil terminal, and a refinery at a subsequent stage.

The government received an expression of interest from Sheikh Ahmed Dalmook Al Makhtoom, member of the Ruling Family of Dubai, United Arab Emirates, in July when the previous government was at the helm of affairs, led by the PML-N.

According to the proposal, the oil terminal project would have multiple benefits for Pakistan such as, acting as the strategic reserve to prevent from future oil crisis, reduce forex loss in terms of demurrage payments, regularise import/export of petroleum products, and aid in direct value-addition by aiding Pakistan’s foreign exchange reserves.

In addition, the SPM would enhance the import capacity and improve storage development, due to various challenges faced by Karachi and other ports. Lastly, the refinery will add to local production and limit foreign exchange outflows, which have been a major challenge for Pakistan recently.

The private office of the member of the Dubai Ruling Family had stated that they have extensive experience and have made strategic investments in the refinery and the oil and gas sectors. One of their recent investments was the acquisition of the Uniper refinery in the UAE Fujairah Terminal. The business operates a 65,000 barrels/day crude processing facility in the Port of Fujairah, selling over 30 million barrels of low-sulphur fuel oil to the shipping industry annually.

The proposal noted that given the strategic location of Pakistan, this project could serve as a crucial link in regional energy trade. It pointed out that successful implementation of this project will not only bolster Pakistan’s energy security, but also stimulate economic growth, create employment opportunities and foster technology transfer to the country.