Print Print 2024-01-01

SIFC wants to know if Aramco’s interest in refinery project persists

  • AC also directs Petroleum Division to assess investment interest of other parties also in the project
Published January 1, 2024

ISLAMABAD: The Apex Committee (AC) of the Special Investment Facilitation Council (SIFC) has directed Pakistan’s ambassador to Saudi Arabia to approach Saudi Aramco Refinery Project regarding current status of their interest in the refinery project, well informed sources told Business Recorder.

The AC also directed the Petroleum Division to assess the investment interest of other parties also in the project.

Regarding requirement in Brown/ Green Field refinery sector, Petroleum Division intimated that there will be a gap between local refining production and projected demand of petroleum products of around 9 Million Tons Per Annum (MTPA) by 2030. It will increase to 14 MTPA by 2035.

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Pakistan currently imports 50 percent of its Mogas (petrol) and High Speed Diesel (HSD) requirement. Annual increase in requirements of Mogas and diesel is projected at 4 percent and 2.7 percent, respectively.

SIFC has been apprised that there will be a need of one new refinery of around 350,000 bpd (15 MTPA) which may be configured in such a way as to maximise Mogas production.

It was also informed that Grace Refinery Limited (GRL) and Falcon Oil Refinery (Pvt) Limited have expressed interest in refinery project.

A Committee comprising representations from Oil and Gas Regulatory Authority (OGRA) , Petroleum Division and Pakistan State Oil (PSO), besides a Refinery Expert, has been notified to hold in-depth evaluation of the proposals. The results of the evaluation process by the Committee will be presented in the next Executive Committee (EC) of the SIFC.

Secretary Petroleum has been directed to provide an update on decisions of the Cabinet Committee on Energy (CCoE) regarding policy amendments to remove hurdles from Brownfield investors and to approve revised timelines for the execution of upgraded agreements between the refineries and OGRA and present these in the next EC.

According to the sources, Final Investment Decision (FID) of Energas LNG Terminal is subject to completion of the following outstanding matters; (i) signing of GTA with SNGPL; (ii) exemption from Third Party Access and; (iii) 5- Year FBR tax exemption.

Petroleum Division has been directed to finalise draft amendments for exemption from Third Party Access for legislative changes .

The SIFC was further informed that federal government contributes a subsidy of around Rs 20 billion on LNG for fertiliser plants. Provinces must contribute by sharing the burden of this subsidy, agriculture being a provincial subject.

It was decided that two committees will be established to devise firmed up recommendations on the matter, which may be presented in the next EC for devising sharing mechanism of LNG subsidy for current year and for gas pricing reforms in fertilizer sector.

The Executive Committee was further briefed that there was inclusion of TAPI in Foreign Investment Promotion and Protection Act (FIPPA) 2022, and commercial and legal experts have been engaged to evaluate the alignment of existing commitments under Gas Pipeline Framework Agreement (GPFA) and Host Government Agreement (HGA) with the incentive package under FIPPA. Petroleum Division has been directed to conclude all agreements by December 31, 2023.

Secretary Petroleum is tasked to present updated status of Reko Diq regarding ongoing evaluation process with Manara minerals and draft infrastructure plan for Chagai-Gwadar Corridor to be presented in the next EC meeting.

Copyright Business Recorder, 2024

Comments

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TimetoMoVVeOn Jan 01, 2024 09:58am
Look if the Suadi's are interested they would have contacted you. They didn't. Get the message.
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fuad Jan 01, 2024 10:26am
"SIFC has 'directed' Saudi Ambassador...", poor choice of reporters words, if the actual words were not picked from the official communique.
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Haq Jan 01, 2024 11:44am
SIFC is all about attracting foreign ($s) investment, with minimum (single) approvals & max tax benefits. Without approval of long overdue 'Refinery Policy' including both Green & Brown Fields. Since oil & gas (from exploration, production, storage, transmission, refining, blending, marketing, imports, distribution) sectors are highly regulated, with taxes in every stage / form, existing refineries, oil & gas producers, LNG terminals, consumers (with exception of influenced power & fertilizer plants) are struggling & declining demand finished petroleum products. Industries & households facing acute gas shortages. Declining oil & gas fields... heavy reliance on imports (crude oil, finished products, LNG, LPG) are draining foreign exchange reserves. With Million's of dollars per month repatriated by MNCs, non condusive business environment, ever increasing taxes (IMF demands), beauracratic hurdles, inconsistent policies, law & order, political wranglings, discourages local investors
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Usman Jan 01, 2024 12:01pm
Move on.make it competitive and give othrr companies a chance.we need to stop this govt to govt investments.Open up the country to foreign companies.make it in a way that its attarctive to them.
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Aamir Latif Jan 01, 2024 12:56pm
Why PARCO 10MTPA Coastal Refinery GoP approved project was shelved despite start of FEED process? thanks to tabdeeli govt for its incapacity to manage this...Every insider knows the reason and it's really sad fed govt couldn't do anything to revitalize which would now been in completion phase.. Fail to understand why Aramco will be interested to set up Refinery in Pakistan with their own imported crude in a not so big market... Current refineries failing to upgrade to meet new EU standards... A lot is desired to review the overall refining status quo with clear way forward plus if phasing out older refineries envisaged due to their upgrade failure...
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dr.fahad Jan 01, 2024 03:57pm
@Haq, SIFC is for consistent policy . One govt make one agreement with international investors then new government don't obey it .
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Twain pen di Jan 01, 2024 04:09pm
this too will be a failure.
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Saeed Jan 01, 2024 04:38pm
@Aamir Latif, tabdeeli government has gone two years ago why did the highly competent pdm government not revive it???
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Wasee Jan 01, 2024 06:31pm
No need to comment on something you don't know ABC of .
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Rashid zia Jan 02, 2024 12:02am
I wonder why our chief, Pm goes out and convince the buisness community to invest in pakistan. I been trying myself for the same and luckly i was able to convice the foreign invester to invest in the field of BIOMASS in pakistan. They agreed and have send me a complete feasibility of it. Now im going around and discussing this great opertunity of bringing pakistan 9 billion euro investment which the investor assured. I wish SIFC chairman (if appointed yet)to give me some time and i wish to discuss this great opertunity with COAS too. As i was informed he is taking full interest in it. Our priority is in the field of agriculture by creating 30000 jobs and making electricity through Biomass. Hope some decision maker see my msg and approach me. Looking forward Rashid zia 0300 9551314
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Twain pen di Jan 02, 2024 09:11pm
@Rashid zia, thankyou for wasting everyone's time.
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