Future of Saudi investment on refinery in question

ISLAMABAD: Special Assistant to Prime Minister on Power and Petroleum has told The News that the Kingdom of Saudi Arabia will not install a refinery at Gwadar but has indicated to set up a refinery along with a petrochemical chemical complex somewhere at Hub or near Karachi.

“However, there is no mentionable progress from Aramco as to when and where the deep conversion refinery with the capacity to refine 250,000 barrels per day of crude oil will be set up.” It is pertinent to mention that during the visit of Crown Prince Mohammad Bin Salman to Pakistan in February 2019, Saudia Arabia had signed MoUs of $20 billion in various sectors of economy and from this amount, announced to invest $10 billion in refinery and petrochemical complex at Gwadar.

The SAPM said that Aramco conducted a feasibility report according to which it found that setting up the refinery at Gwadar was not feasible. However, it can be established at Hub, Balochistan, or near Karachi, saying in the next five years, another refinery with capacity to refine over 200,000 barrels per day was imminent.

The official sources said when the ties between Saudi Arabia and Pakistan in the recent past took a dip, the oil facility was withdrawn. Saudi Aramco, at that time, is reported to have indicated to Pakistan authorities to ask Prime Minister Imran Khan to contact the top Saudi leadership on decision about setting up of the refinery and petrochemical complex. But the Foreign Office had suggested that it was not the right time to contact Saudi leader Mohammad Bin Salman on the project because of the ties that had turned cold because of the foreign policy of the country.

Now the ice has melted and relations with KSA were improving and Saudi Crown Prince recently invited Prime Minister Imran Khan and indicated to revive the Saudi oil facility with the promise that he will soon send a high-level delegation to Pakistan. The officials said that if KSA sends its delegation for follow-up meetings, then the government will take up the issue for investment of $10 billion for the refinery and petrochemical complex in Pakistan.

However, Tabish Gauhar said that after the recent visit of the prime minister of Pakistan to KSA, no word had been conveyed to the Petroleum Division about any development on the refinery. But it was told that KSA had indicated to restore the oil facility. The Finance Division is in contact with Saudi officials with regard to restoration of the oil facility.