Despite the government’s efforts to convince Saudi Aramco to engage in the development of a $10 billion state-of-the-art deep conversion refinery, the business seems not interested in the project.
According to the publication, if approved the deep conversion refinery would have the capacity to refine 300,000 barrels of crude oil per day (BPD).
Pakistan wanted Saudi Aramco, a big company, to invest in a refinery project. To make them interested, Pakistan offered many benefits, like reduced taxes and other incentives. But recently, Saudi Aramco seems less interested. They say they are not connected to the Saudi government as much anymore and investing in refineries is not as profitable as before.
Saudi Aramco hinted that they might invest less money, around $900 million instead of the initially planned $1.5 billion. They also said they won’t lead the project, and Pakistan has to find its own money for the project. The situation might change after Pakistan’s elections.
Saudi Aramco now seems more interested in building a petrochemical complex rather than a refinery. This has created a problem for the Pakistani authorities.
Initially, Pakistan had a plan where Saudi Aramco would lead the project and help get a $7 billion loan. Now, Pakistan has to arrange the loans on its own. There’s hope that things might improve after the elections.
The government had a plan to finish the project with a 30:70 ratio, meaning $3 billion as equity and $7 billion as loans. They signed an agreement with a Chinese company for the project, and some Pakistani companies were also involved.
Later, Saudi Arabia suggested involving a Chinese company called Sinopec in the project. Now, Pakistan is in talks with Chinese banks and Sinopec for the project.
In simple terms, Pakistan wanted Saudi Aramco to invest in a refinery project, but things are not going as planned. Saudi Aramco is less interested, and Pakistan is now looking to involve a Chinese company instead. The situation might change after the elections.
