AIRLINK 73.00 Decreased By ▼ -2.16 (-2.87%)
BOP 5.35 Decreased By ▼ -0.10 (-1.83%)
CNERGY 4.31 Decreased By ▼ -0.08 (-1.82%)
DFML 28.55 Increased By ▲ 0.91 (3.29%)
DGKC 74.29 Increased By ▲ 2.29 (3.18%)
FCCL 20.35 Increased By ▲ 0.06 (0.3%)
FFBL 30.90 Decreased By ▼ -0.15 (-0.48%)
FFL 10.06 Increased By ▲ 0.09 (0.9%)
GGL 10.39 Increased By ▲ 0.12 (1.17%)
HBL 115.97 Increased By ▲ 0.97 (0.84%)
HUBC 132.20 Increased By ▲ 0.75 (0.57%)
HUMNL 6.68 Decreased By ▼ -0.19 (-2.77%)
KEL 4.03 Decreased By ▼ -0.17 (-4.05%)
KOSM 4.60 Decreased By ▼ -0.17 (-3.56%)
MLCF 38.54 Increased By ▲ 1.46 (3.94%)
OGDC 133.85 Decreased By ▼ -1.60 (-1.18%)
PAEL 23.83 Increased By ▲ 0.43 (1.84%)
PIAA 27.13 Decreased By ▼ -0.18 (-0.66%)
PIBTL 6.76 Increased By ▲ 0.16 (2.42%)
PPL 112.80 Decreased By ▼ -0.36 (-0.32%)
PRL 28.16 Decreased By ▼ -0.59 (-2.05%)
PTC 14.89 Decreased By ▼ -0.61 (-3.94%)
SEARL 56.42 Decreased By ▼ -0.91 (-1.59%)
SNGP 65.80 Decreased By ▼ -1.19 (-1.78%)
SSGC 11.01 Decreased By ▼ -0.16 (-1.43%)
TELE 9.02 Decreased By ▼ -0.12 (-1.31%)
TPLP 11.90 Decreased By ▼ -0.15 (-1.24%)
TRG 69.10 Decreased By ▼ -1.29 (-1.83%)
UNITY 23.71 Increased By ▲ 0.06 (0.25%)
WTL 1.33 Decreased By ▼ -0.01 (-0.75%)
BR100 7,434 Decreased By -20.9 (-0.28%)
BR30 24,206 Decreased By -44.4 (-0.18%)
KSE100 71,359 Decreased By -74.1 (-0.1%)
KSE30 23,567 Increased By 0.5 (0%)

ISLAMABAD: Saudi Arabia has reportedly not responded to Pakistan’s request to extend purchase of oil on deferred payments facility, sources close to caretaker Minister for Power and Petroleum told Business Recorder.

Caretaker Minister Muhammad Ali met with his Saudi counterpart during his visit to Saudi Arabia on 9-11 January. They discussed important bilateral matters including the Refinery Project, Reko Diq, ACWA’s solar project, oil on deferred payments, Saudi Development Fund (SDF) infrastructure projects and cooperation with Saudi Geological Survey.

According to sources, the caretaker Minister also took up the issue of extending the purchase of oil on deferred payments facility in his meeting with the Saudi Minster for Energy.

Deferred payment basis: $400m petroleum products imported during Jul-Oct

The Saudi side acknowledged receiving the letter from Pakistan’s Finance Minister and said that Saudi Finance Ministry was undertaking the required technical studies with the Saudi EXIM Bank. The Saudi Energy Minister said that though this subject was not within his jurisdiction, he would ask the Finance Minister to look favourably into it and expedite the decision.

Refinery Project: The meetings with ARAMCO and the Saudi Minister for Energy revealed that the Saudi side is more interested in pursuing a petrochemical project instead of a refinery. This is due to the change in ARAMCO’s strategy of pursuing Crude-to-Chemical instead of investing in new refineries.

ARAMCO’s future strategy is based on the realisation that reliance on refined petroleum products for transportation is going to decrease due to transition to greener technologies.

In order to retain maximum profitability from each barrel of crude, ARAMCO is targeting to convert 70-80% of each barrel into chemicals. It has already started to invest in these technologies and has partnered with other players such as SABIC to become a leading player in petrochemicals industry.

The Saudi side argued that a multi-billion-dollar petrochemical project would be more profitable for Pakistan, as well as its partners, as it would enable the country to incorporate more parts of the value chain.

The Saudi side expects that Pakistan would reach out to the Chinese and firm up their inclusion before a formal three-way partnership could be agreed.

For ARAMCO, the important elements would be project financing, profitability, right partner(s), incentives provided, location, scale and demand of the products in the market.

The project would require a business case and a feasibility study to find out details such as rate on return and profitability. ARAMCO also prefers that the project is located near the demand centres- implying that it may be planned near Karachi (the Secretary Petroleum indicated that Hub, or a site near Steel Mill could be appropriate in this regard).

On demand of petrochemical products, ARAMCO argued that while growing economic needs of Pakistan would create sufficient domestic demand, ARAMCO and its partners could potentially solve the issue of off-taking the surplus and selling the products elsewhere, if needed.

It was repeatedly stressed that the Saudi Ministry of Energy remains very supportive of doing business with Pakistan and they would continue to push ARAMCO to work out best possible investment proposal for Pakistan.

The Minister indicated that Pakistan would carefully study this proposal and discuss it with the Chinese side.

Reko Diq: On Saudi investment in the Reko Diq project, both sides reiterated their keen interest on finalizing the agreement. The Minister highlighted that the main issue is the pricing which still needs to be agreed. It was agreed that both negotiating teams would work together to conclude the deal at the earliest.

Investment by ACWA Power: ACWA reiterated interest to invest in Pakistan’s renewable energy sector on the basis of its proposal shared with it on November 6, 2023. The two sides also discussed the possibilities of collaboration in water desalination and green fertilizer production using hydrogen. ACWA said that it would prefer a G2G framework with sovereign guarantees, adequate site allocation and linkage with transmission infrastructure for power evacuation.

“We expressed our preparedness to further discuss the requirements of ACWA for which it was agreed that following an initial virtual meeting in the next ten days, a delegation from ACWA would visit Pakistan for more detailed discussions and possible site visits”, the sources quoted ACWA as saying.

The matter was further discussed in the meeting with the Saudi Energy Minister, who telephoned Chairman ACWA Power to lead the delegation to Pakistan in two-to-three-week’s time.

Pakistan also pitched for funding for infrastructure projects linking Redo Dig through rail and road network to the ports in Karachi and Gwadar. SFD said that they would study the proposals when they are formally received through the established channel of EAD. It was agreed that Pakistan would share these proposals of SFD through EAD.

The cooperation in the field of geological exploration was also discussed intensively in these meetings. Saudis stated that the Kingdom was undertaking its own geological survey to obtain update data about its mineral endowment. They offered Pakistani experts may join this exercise to learn the latest techniques and methods used for geological surveying and mapping. Pakistan welcomed this proposal and agreed to cooperate closely in this regard.

Copyright Business Recorder, 2024

Comments

Comments are closed.