Aramco keen on establishing oil refinery in Gwadar

ISLAMABAD: Saudi Arabia’s state oil giant Aramco has shown interest in establishing a refinery at Oil City, Gwadar.

The oil refinery would have the capacity of refining crude oil up to 400,000 barrels per day with possible investment of $5 to $8 billion. However, the exact details will be worked out through feasibility study after signing MoU within the next 30 days.

It is the wish of Islamabad to convince the fact-finding mission of Saudi Arabia to establish maximum capacity of refinery of crude oil up to 400,000 barrels per day so that they could meet increasing demands of both Pakistan and China for provision of oil supply through the Gwadar port city.

One top official of PTI government disclosed to The News in background discussions here on Thursday that after refusal of government-to-government deal for selling two LNG-based power plants based in Punjab during technical mission of Saudi Arabia, another Saudi company of power sector known as ‘ACWA’ agreed to participate in open competitive bidding of Baloki and Haveli Bahadarshah LNG power projects with the capacity of over 1,200MW each to help Islamabad provide dollar inflows for overcoming balance of payment problems being faced by Pakistan. Now the Privatisation Commission will be assigned to accomplish the process for selling these two LNG-based power plants within next 6-8 months period.

The same ACWA public sector giant of Saudi Arabia will also explore possibilities for investing in greenfield projects of renewable energies up to 2,000MW in months ahead. Pakistani authorities convinced the Saudi team that government-to-government deal for power plants could raise transparency related questions, so open bidding would be done and the Saudi company should participate in the bidding process and win the deals by offering attractive rates.

For construction of oil refinery at Gwadar, the official said that the feasibility study would firm up its exact capacity and required cost to accomplish this giant task. Now it has been estimated that the cost of the refinery will stand in the range of $5 to $8 billion depending upon the capacity of refinery. Islamabad’s economic team has asked Saudi authorities to establish refinery with the capacity of 200,000 to 400,000 barrel per day so that it could contribute for supplying oil to both Pakistan and China.

Aramco is one of the largest companies in the world by revenue, and according to accounts seen by Bloomberg News, the most profitable company in the world. Saudi Aramco has both the world's second-largest proven crude oil reserves, at more than 270 billion barrels (4.3×1010 m3), and second-largest daily oil production.

Headquartered in Dhahran, Aramco operates the world's largest single hydrocarbon network, the Master Gas System. Its 2013 crude oil production total was 3.4 billion barrels (540,000,000 m3), and it manages over one hundred oil and gas fields in Saudi Arabia, including 288.4 trillion standard cubic feet (scf) of natural gas reserves. Saudi Aramco operates the Ghawar Field, the world's largest onshore oil field, and the Safaniya Field.

The second power giant known as ACWA Power International develops, invests, co-owns, and operates a portfolio of power generation and desalinated water production plants. The company’s projects include thermal, solar PV, solar CSP, and wind. It also offers operations and maintenance service for the power and water desalination industry in Saudi Arabia. The company was founded in 2004 and is headquartered in Riyadh, Saudi Arabia with regional offices in Dubai, Istanbul, Cairo, Rabat, Johannesburg, Hanoi, and Beijing.