Four Pakistani state-owned petroleum companies have signed a memorandum of understanding (MoU) to facilitate a $10 billion Saudi investment in a new oil refinery at Gwadar in Balochistan. This refinery will have a production capacity of 300,000 barrels per day, making it the largest in the country. The government is in advanced negotiations with Saudi company Aramco to carry out this project. The state-owned companies, including OGDCL, PSO, PPL, and GHPL, will join the project through equity participation.
The refinery project aims to create an integrated refinery petrochemical complex with a minimum crude oil processing capacity of 300,000 bpd. It will also include various components such as marine infrastructure, petrochemical facilities, and storage for crude oil and refined products.
The lack of new refinery projects in Pakistan over the past decade has limited the country’s refining capacity to around 11 million tonnes, despite a forecasted growing demand for petrol and diesel. However, the government has introduced a new policy to facilitate Saudi investment, which includes customs duty incentives, a tax holiday, and exemption from various levies and duties for the project.
The Saudi oil firm has expressed interest in providing the entire equity for the multibillion-dollar refinery project, leading the Pakistani government to consider a joint venture with the state-owned companies.
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