ISLAMABAD: Saudi Aramco is evaluating an offer of Pakistan to establish a deep conversion refinery. The project involves engineering, procurement, construction (EPC)-F mode. Saudi Arabia will build the project.
Saudi Aramco has paced up work on this proposal of Pakistan as the government has announced 20-year tax holiday for oil refinery projects in the country.
An official of Energy Division said that they are are in touch with the key officials of Aramco, a Saudi oil giant to sign agreement.
The Saudi oil group has completed the Pre-feasibility study and marketing assessment, and the next phase involves conducting the Front End Engineering Design to evaluate the feasibility of the project before proceeding with the major undertaking.
A file photo of crude oil that will be refined at the refinery being established by Saudi Aramco in Pakistan.
Meanwhile, China is also expected to provide assistance in mitigating risks for the Saudi investment.
Pakistan has already approved and shared the Green Refinery Policy with major economies’ capitals. The refining policy offers attractive incentives, including a 7.5 percent deemed duty for 25 years and a 20-year tax holiday.
The project will be located in Hub, Balochistan, and will have a refining capacity of 350,000-450,000 barrels per day.
The estimated cost of the refinery is $10.5 billion, with a loan-equity ratio of 70:30. Saudi Aramco will hold 30% equity, sharing it with Pakistan State Oil on a 50% basis. The official also mentioned that KSA may provide 100% equity. Additionally, 70% of the project cost will be arranged through loans.
If a petrochemical complex is included in the project, the refinery’s cost could increase from $10.5 billion to $14 billion. This would involve the addition of a new (greenfield) 300-400k bpd deep conversion refinery and petrochemical complex, along with the necessary import terminal and pipelines infrastructure, to meet future demand.
Saudi Arabia and UAE deposit $3 billion with SBP ahead of IMF loan’s approval
Earlier, Finance Minister Senator Muhammad Ishaq Dar said that Saudi Arabia and UAE have deposited $3 billion in the State Bank of Pakistan’s (SBP) account. He said that Saudi Arabia deposited $2 billion while UAE deposited $1 billion with the SBP ahead of ahead of the IMF’s executive board meeting.
Ishaq Dar expressed gratitude to the Prime Minister, the army chief, and the leadership of Saudi Arabia for their unwavering support during this challenging economic period.
Finance Minister expressed optimism for the future saying that more good news are expected in the coming days.
Pakistan’s economic situation was gradually stabilizing, he said, adding this infusion of funds from the Kingdom of Saudi Arabia will further improve the country’s financial prospects.
