Around 10 memoranda of understanding (MoUs) for cooperation between the governments of Pakistan and Saudi Arabia in various sectors will be signed on the arrival of Saudi Crown Prince Mohammad bin Salman on Saturday.
While talking to media persons here on Friday, Minister for Petroleum Ghulam Sarwar Khan revealed that Saudi Arabia would sign10 MoUs, including two in the petrochemical and mineral development sectors.
He said that Saudi Arabia would invest approximately $10 billion in setting up a petrochemical complex and a refinery at Gwadar. Another MoU would be signed for development of mineral sector including investment in the Reko Diq project.
"Saudi investors have also shown interest in providing technical cooperation and financial assistance in building strategic LNG storage capacity," he added.
The minister said that the proposed oil refinery would have capacity to produce 200,000 to 300,000 bpd oil which will help cut oil import bill by $1.2 billion per annum. He further said that local refineries have capacity to refine 13.5 million tonnes crude oil against total consumption of 26 million tonnes.
The cost of refinery will be determined through a feasibility study. Initially both the sides will study the feasibility of the proposed project after signing of an MoU.
He said both the sides would also sign an MoU related to deferred payment of $9.6 billion for three years. "The Saudi side is at advance stage in completing procedures, and that their technical teams including the Saudi energy minister visited Pakistan three times," he added.
In mineral sector cooperation, an MoU would also be signed. The governments of Balochistan and Khyber Pakhtunkhwa are also on board. He said Saudi side also showed interest in investing in fertilizer sector and renewable energy.
Responding to a question, he said the Saudi side did not ask for security for refinery or petrochemical complex; however, the government would ensure security for foreign investors in Balochistan and he had held several meetings with the heads of law enforcement agencies (LEAs) there.
Responding to another question, he said the government is planning to revisit the approved slabs for gas users which led to inflated gas bills. In addition, he said, an external audit of both the Sui companies- Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL) - had already been ordered.
Defending recent approval of a summary by the Economic Coordination Committee (ECC) for undertaking/ implementing the Machike-Taru Jabba Oil Pipeline Project to the Frontier Oil Company owned by FWO, he said that the Inter-State Gas Systems (Private) Limited (ISGS) was given a chance to execute the project but it delayed it. "The ISGS did not apply for a licence for pipeline project to the Oil and Gas Regulatory Authority till one year after approval from the ECC in the Pakistan Muslim League-Nawaz government," he added. He further added that other MoUs will also be signed on drug control and its smuggling, youth and sports, combating crime and cultural cooperation.