Four top Pakistani state-owned enterprises signed a memorandum of understanding (MoU) to collaborate on a $10 billion Greenfield Refinery project in Balochistan, which will be developed in collaboration with Saudi Aramco at the key Gwadar port.
According to an official statement, the MoU signing ceremony took place on Thursday at the main office of Oil and Gas Development Company Limited (OGDCL).
Oil and Gas Development Company Limited (OGDCL), Pakistan State Oil (PSO), Pakistan Petroleum Limited (PPL), and Government Holdings Private Limited (GHPL) will collaborate through a collaborative investment strategy, according to the announcement.
It stated that the project will get considerable foreign investment through equity participation from world-class oil and gas conglomerates.
In Pakistan, an integrated refinery-petrochemical complex with a crude oil processing capacity of at least 300,000 barrels per day (BPD) and a petrochemical factory is planned.
The integrated refinery petrochemical complex will include a variety of components such as marine infrastructure, petrochemical complex, crude oil and refinery utilities, pipeline connection, and so on.
Masadik Malik, State Minister for Petroleum, discussed the project and its benefits to the national economy in terms of economic growth, foreign exchange savings, energy security, job possibilities, and social upliftment.
In his initial remarks, Petroleum Secretary Captain (retd) Muhammad Mahmood presented key parts of the GreenField Refinery Policy and emphasised the Petroleum Division’s commitment to the development and growth of the petroleum sector.
The refinery, which will generate 8 million tonnes of diesel and 6 million tonnes of petrol per year to Euro 5 requirements, will be built under the recently authorized green refinery strategy, which includes incentives such as a 7.5% deemed duty for 25 years and a 20-year tax holiday.
The project will be financed on a 30:70 equity-loan ratio, with Pakistan and Saudi Aramco each contributing 15 percent of the equity. Saudi Aramco, one of the world’s biggest oil companies, will lead the project in arranging the loans. Saudi Aramco would provide $1.5 billion as equity and the same amount would be arranged from Pakistan.
The official said the outgoing coalition government had increased the pace of talks with Saudi Arabia for an umbrella agreement to materialize the project, which is expected to boost Pakistan’s energy security and reduce its import bill.