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Saturday July 13, 2024

$10bn green refinery: SIFC asks MoFA to take Sinopec, Aramco on board for MoU with PSO

Sinopec has asked PSO to conduct a market study on its own if there is a demand for petroleum products

By Khalid Mustafa
July 03, 2024
A view of a Pakistan State Oil (PSO) petrol station. — PSO/File
A view of a Pakistan State Oil (PSO) petrol station. — PSO/File

ISLAMABAD: Pakistan wants the state-owned Pakistan State Oil (PSO), Chinese Sinopec and Saudi Aramco to sign a non-binding MoU for materializing the $10bn green refinery. The Special Investment Facilitation Council (SIFC) to this effect has directed the Ministry of Foreign Affairs (MoFA) to facilitate the Petroleum Division to take Saudi Aramco and Sinopec on board for signing a non-binding trilateral MoU with PSO for cooperation on the green refinery project, a senior SIFC official told The News.

“Sinopec earlier showed concern that there was a lack of demand for petroleum products in the Pakistan market and in this regard asked the Petroleum Division, in collaboration with Pakistan State Oil, to first conduct a market study. Sinopec will then make up its mind to act as EPC contractor and arranging funding.”

“Earlier there was a proposal that PSO, Sinopec and Aramco carry out a joint study to assess whether the crude-to-petrochemical refinery will be economical and beneficial for the said three stakeholders or not.”

Under the new scenario, Sinopec has asked PSO to conduct a market study on its own if there is a demand for petroleum products to be produced by the refinery or not. Pakistani authorities, the official said, are in touch with the Sinopec management for the said project.

The KSA also wants the engineering, procurement, and construction (EPC) contract to be awarded to Sinopec and to this effect, PSO, nominated by the Government of Pakistan, is in contact with the Bank of China and Sinopec. The under-consideration proposal seeks a crude-petrochemical refinery with 70 percent capacity to refine petroleum products and 30 percent capacity to produce chemical products.