$10b green refinery: Aramco, Sinopec to decide project’s fate after study by PSO

ISLAMABAD: In a new development, Saudi Aramco and Chinese company Sinopec will decide if they will help establish the state-of-the-art mega project of $10 billion green refinery or crude-to-petrochemical complex after the Pakistan State Oil (PSO) completes the market study in December this year.

“In the Pak-Saudi Arab working group meeting held on August 29, PSO disclosed that the market study required by Saudi Aramco and Sinopec will be completed by December this year which will determine the fate of the project. The result of the market study will exactly help Aramco and Sinopec to know whether to start the mega project or not,” a senior official, who was part of the meeting, told The News.

“In July 2024 the board of Pakistan State Oil (PSO) approved up to $3 million for completing the market study.The Pakistani authorities have already notified the new green refinery policy loaded with huge incentives of 7.5 percent deemed duty for 25 years and a tax holiday of 20 years as per wish of Saudi Aramco but later on, it has been told to the authorities, the official said, that Saudi Aramco has detached itself from the royal government and has traveled to deregulation to a reasonable extent which is why Aramco management is no more inclined to invest in the refinery business across the world, as the refinery business is no more lucrative like in the past.

“However, after hectic diplomatic endeavors, Saudi Aramco asked Pakistan’s authorities to include Sinopec as an EPC contractor. It was decided that PSO, Sinopec, and Saudi Arabia would conduct a joint market study. But later on, both Sinopec and Saudi Aramco pushed PSO to first carry out a market study on its own, and then both entities will decide accordingly.”

“The study will also pave the way for the future course of action for Saudi Aramco and Sinopec to decide if they become part of any of the two projects or not.”