Pakistan, Saudi Arabia hold expert level talks on parameters of mega refinery

• Pakistan, Saudi hold technical-level talks to finalise parameters.
• Saudi Aramco would be main shareholder of refinery.
• Refinery will be able to export 35-40% of POL finished product.

ISLAMABAD: Pakistan and Saudi Arabia held technical-level talks to finalise the parameters of a brand-new deep conversion refinery to be installed by the kingdom, The News reported.

The project will be announced during the forthcoming visit of Saudi Crown Prince Mohammad Bin Salman to Pakistan.

Prime Minister Shehbaz Sharif — who visited Saudi Arabia last month —held consultations regarding the MoUs worth $21 billion, the refinery project and the petrochemical complex of $10 billion earlier signed in February 2019.

However, under the new scenario, the petrochemical complex is no more part of the project. Now the refinery will only be set up with the capacity to refine 350,000 to 400,000 barrels of crude oil per day, a senior official who is part of Abu Dhabi talks told The News.

“Pakistan delegation is being headed by Musadik Masood Malik, Minister of State, and comprises secretary of petroleum, secretary of the board of investment, MD PSO, MD PARCO, and other sector officials of the Petroleum Division. The KSA is being represented by the Saudi energy minister and Saudi ARAMCO officials.”

“Both sides want to resolve all technical issues and parameters of the mega project. Saudi Aramco would be the main shareholder of the refinery to be set up in the country and in addition, there will be more stakeholders in the refinery project.”

The government has already updated the refining policy draft for the new refinery with 16% profitability and 20-year tax holiday and six years of protection duty. However, the Pakistan delegation is in talks with the KSA team with an open-ended policy, the official said. 

“In case, KSA asks for more incentives, then the Pakistan side would not hesitate in considering and accommodating them.” The official said that the new refinery will be able to export 35-40% of Pakistan Oilfields Limited (POL) finished product and the rest will be used to cater to the country’s needs.

Saudi Aramco, he said, has already carried out its feasibility and it found that setting up a refinery in Gwadar is not feasible. However, it is feasible if it is installed either in Karachi or Hub (Balochistan), which is also near Karachi. The official said that China may also be a part of the said refinery.

The UAE government, the official said, is hesitant to set up its coastal refinery (PCR-2) at Hub and the country wants the KSA to come up with a major investment in the new refinery of 350,000-400,000 BPD with more stakeholders in the project. 

Pakistan delegation is also in talks with Abu Dhabi National Oil Company (ADNOC) for catering to the energy needs of the country.