ISLAMABAD: Four Pakistani state-owned oil and gas companies signed a MoU amid advance-level negotiation with Saudi Arabia to execute a $10 billion green refinery project at the strategic Gwadar Port in Pakistan.
The project will have significant foreign investment from world-class oil and gas giants through equity participation. The Oil and Gas Development Company Limited (OGDCL), Pakistan State Oil (PSO), Pakistan Petroleum Limited (PPL), and Government Holdings Private Limited (GHPL) will collaborate through a joint investment strategy.
Minister for State Musadiq Malik was the chief guest along with Secretary Petroleum Captain Muhammad Mahmood (retired) to witness the signing ceremony.
OGDCL, PSO ink agreement for ‘greenfield refinery project’ in Balochistan
In his address, Malik said that the Saudi Arabia oil firm showed the willingness to inject the entire equity into the multibillion-dollar refinery project, leading the Pakistani government to decide on a joint venture with key Pakistani state-owned companies.
Under this plan, he said, the PSO,OGDCL, PPL and GHPL will contribute 70 percent equity, while Aramco will inject the initial 30 to 50 percent equity into the project. Pakistan has also inked an engineering, procurement and construction contract with a Chinese firm in line with the requirements of Saudi Arabia.
Malik said the Pakistan government had brought in the Chinese company for the purpose of EPC contracts. “Pakistan has brought to the table world-class refinery EPC construction partners who are going to take a position in the equity,” the minister said.
He said the establishment of Greenfield Refinery will help decrease the trade deficit of the country. Giving a brief of the government’s achievements during the past one year, the minister said the 138 million cubic feet natural gas of worth $570 million was added in the gas system and $500 million indigenous gas produced will soon be added.
He said the dividends of the agreement signed with Russia for crude oil will reach the masses very soon.
Musadik Malik said negotiations are underway with our friendly countries including Saudi Arabia, the United Arab Emirates, and other member countries of the Gulf Cooperation Council for the import of cheap oil and gas to the country.
He said the incumbent government also resumed talks on Turkmenistan-Afghanistan-Pakistan-India Gas Pipeline project, which was shelved by the previous government, while a framework agreement was signed with Azerbaijan for LNG procurement on flexible terms.
The minister said under the agreement, Azerbaijan will offer one cargo of LNG each month and it will be up to Pakistan to either accept the cargo or not. He said there will be no financial penalty if Pakistan does not accept the cargo.
He said the government will also open schools and hospitals at all the places, where projects for oil and gas exploration will be launched to facilitate the local population.
The project envisions setting up an integrated refinery petrochemical complex with a crude oil processing capacity of minimum 300,000 BPD along with petrochemical facility in Pakistan. The integrated refinery petrochemical complex shall comprise of various components such as marine infrastructure, petrochemical complex, storages for crude oil and refines utilities, pipeline connectivity etc.
Secretary Petroleum–Captain (retired) Muhammad Mahmood in his opening remarks shared salient aspects of the Green Field Refinery Policy and underscored the commitment of the Petroleum Division towards the development and growth of the petroleum sector.
Copyright Business Recorder, 2023