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World

Riyadh offers LNG, crude oil and revival of SFD pact

  • Saudi Arabia has sent this offer to Pakistan in draft minutes of the upcoming meeting of the Joint Working Group under the umbrella of the Saudi Pakistan Supreme Coordination Council
Published August 18, 2022
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ISLAMABAD: Saudi Arabia has reportedly offered Liquefied Natural Gas (LNG) to Pakistan on commercial basis in addition to activating an agreement on financing and providing supplies of crude oil and petroleum products signed between Saudi Fund and GoP.

Saudi Arabia has sent this offer to Pakistan in draft minutes of the upcoming meeting of the Joint Working Group under the umbrella of the Saudi Pakistan Supreme Coordination Council (SPSCC).

According to the draft minutes sent by Saudi side prior to the meeting of SPSCC, the two sides agreed to follow up and activate the agreement on financing and providing supplies of crude oil and petroleum products to Pakistan, signed between the Saudi Fund for Development (SFD) and the Pakistani government and to discuss the following: (i) the extension of the financing Agreement between the Saudi Fund for Development and the Pakistani government, and the provision of supplies of crude oil and petroleum products to Pakistan; and (ii) the supply of liquefied LNG to Pakistan on commercial basis.

Saudi Arabia plans to renew $3bn deposit in assistance to Pakistan: report

The Saudi side, represented by the Saudi Fund for Development, expressed a desire to view the Pakistani national development plan, in addition to the Pakistani government’s priorities for development projects for the next two years, in order to study the possibility of financing important development projects; and the Saudi side, represented by the SFD expressed a willingness to finance development projects in Pakistan in the fields of energy, industry, mineral resources and infrastructure, to be implemented by Saudi companies.

The SFD has completed the preparation of a number of Funding Agreements and needs confirmation from the Pakistani side for funding projects: (i) five agreements in the energy sector amounting to 162,143 million Riyals; (ii) an agreement in the road sector in the amount of 100 million Riyals; and (iii) an agreement in the water sector amounting to 153.57 million Rivals.

Pakistan, Saudi Arabia agree to strengthen ongoing cooperation in energy, investment

Cooperation in industry and mineral resources sectors: The two sides agreed to continue working on activating the MoU in the field of mineral resources between the Ministry of Industry and Mineral Resources Saudi Arabia, and the Ministry of Energy (Petroleum Division) Pakistan, and to discuss the following topics: (i) supporting technical research in the mining sector;(ii) strengthening cooperation between academic and scientific institutes;(iii) promoting and developing the best standards and practices in the mining sector;(iv) exchange of information and experiences in the mining sector; (v) cooperating in the field of mineral exploration, its extracting and its processing;(vi) developing skills in the field of mineral exploration, its exploitation and its processing; (vii) exchange of experiences in the field of training geologists, engineering, mining technicians, miners and others;(vii) organizing workshops seminars, conferences and other promotional event(s) in the field of mining; and (viii) emphasizing the importance of encouraging the private sector to increase investment between the two countries through exchanging visits to explore the available mining opportunities, the available security guarantees, and the investment advantages that can be obtained.

The Saudi side indicated a desire to view the mining regulations in force, the country’s geology and the extent of infrastructure readiness in Pakistan. The Saudi side expressed a desire to invest in the mining sector in Pakistan.

The Saudi Arabian Mining Company (Ma’aden) has expressed its interest in investing in the mining sector in Pakistan in the “Rekodek “ mine located in Balochistan, by obtaining concession rights or a partnership in developing the mine project.

Cooperation in Commercial Sector: (i) the two sides agreed to cooperate to promote and develop trade exchange, and to solve obstacles that may face exports between the two countries; (ii) enhancing trade exchange between the two countries and overcoming the obstacles facing Saudi exports to Pakistan, most notably the “high-priced customs tariff”; ( iii) the two sides agreed to hold a Saudi-Pakistan economic forum in Riyadh to promote trade exchange and diversify exported and imported commercial products between the two countries, and to explore the available investment opportunities;(iv) Pakistani side urged to expedite the formation of the Business Council and hold the meeting of the Saudi –Pakistani Business Council in Riyadh after its formation by the Pakistani side;(v) the two sides agreed to establish a Saudi-Pakistani company with the aim of investing in vital sectors in Pakistan, stimulating economic growth and providing more job opportunities as well as strengthening the cooperation and partnership between the Kingdom and Pakistan; (vi) the Saudi side represented by Quality Organization (SASO), indicated a desire to activate the Action Plan for the implementation of Technical Cooperation Program signed with the Pakistan Standards and Quality Control Authority (PSQCA,) on November 2, 2021; and (vii) organizing the “Pakistan’s Single Country,’ exhibition in the Kingdom.

The two sides agreed to follow up and activate the Memorandum of Understanding (MoU) that was signed between the Ministry of Energy of Saudi Arabia and the Ministry of Energy (Petroleum Division) of Pakistan, to study investment opportunities in the refining and petrochemical sector, and discuss Saudi Aramco’s proposal with the Pakistan side to emphasize their role in improving the economics of the refinery project and the petrochemical complex.

The two sides agreed to follow up and activate MoU signed between the Ministry of Energy Saudi Arabia and the Ministry of Energy (Power Division) Pakistan in the field of developing renewable energy projects and to discuss the following topics: (i) the offer made by ACWA Power on February 21,2020 to the Alternative Energy Development Board (AEDB), regarding renewable energy projects with a total of 550 MW divided into (350) megawatts of solar energy, and 200 MW of wind energy;(ii) the adoption of the offer submitted by ACWA Power under the umbrella of the MoU signed between the two sides, and the issuance of Letter of Intent (LoI); and (iii) determining if there are any other additional requirements required from ACWA Power to complete the initial award procedures of the two projects.

The two sides agreed to cooperate in the field of agriculture and livestock, for example the development of “Saudi Pakistani” farms in Pakistan with a Saudi investment.

The Saudi side, represented by the Ministry of Investment, indicated its desire to receive a copy of the new Pakistani model of the “draft agreement for the promotion and protection of investment,” and complete the legal procedures in this regard. Moreover, at the same time, the Saudi Ministry of Investment is working with the Saudi General Authority and visiting these companies to build a strategic relationship with them, as well as lack of approved budgets for digital projects from the Pakistani government.

Pakistan is one of the countries targeted for the international expansion of Saudi Elm Company, with the company previously holding discussions with Pakistani companies such as Netcom and InfoTech, but the discussions were stopped due to logistical obstacles and the failure to allocate approved budgets for digital projects from the Pakistani side.

Copyright Business Recorder, 2022

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