Pakistan expects progress on $10 billion Saudi oil refinery project in two months

KARACHI: Energy Minister Muhammad Ali said on Wednesday the country was actively engaged with Saudi authorities on a multibillion-dollar Aramco oil refinery project and expected progress within two months.

Pakistan and Saudi Arabia signed several investment agreements worth $21 billion during a visit to Islamabad by Saudi Crown Prince Muhammad Bin Salman in February 2019.

The Saudi investments included around $10 billion for an Aramco oil refinery and $1 billion for a petrochemical complex project that was meant to be built at the strategic Gwadar Port in the country’s southwestern Balochistan province.

However, almost four years later, there has been little progress on the project. Minister Ali said the work on a multi-billion dollar refinery project was progressing and some tangible outcome would surface in the next one to two months.

“Work on the Aramco oil refinery is going on and we are actively engaged with them, you will see progress on that in next one-two months,” the energy minister said on the sidelines of the 7th edition of The Future Summit in Karachi.

When asked why the project had been delayed, Ali said the project involved investment, funding, structure and policy framework and all these had to be considered while moving forward on it.

“There is no delay as the project is huge involving $8-10 billion and everything from investment funding, its structuring, and policy framework has to be considered.” Responding to reports that the project would be built in Hub district in Balochistan, near Karachi, instead of Gwadar, Ali said the decision would be taken by Aramco.

"The location of the refinery had not been decided as it is up to Aramco to choose whether it would be set up in Gwadar or Hub in Balochistan province." The project contemplates building an integrated refinery in Pakistan that can process up to 450,000 barrels of crude oil per day.

The energy minister also said that the government was trying to cut down the circular debt in the energy sector and had been able to reduce it to some extent. He said the government was also working on capacity payment issues in the power sector as well as energy conservation.