ISLAMABAD: Ten memorandum of understanding (MoUs) including one on a $10 billion oil refinery and petrochemical complex are going to be signed with the Saudi Government during the visit of Saudi Crown Prince, Muhammad Bin Salman to Pakistan.
“New vistas of cooperation will be unlocked on arrival of Muhammad Bin Salman,”Ghulam Sarwar Khan, Federal Minister for Petroleum, said on Friday.
He said that the visit of Crown Prince is success of economic diplomacy between two brotherly countries. Previous governments were keen to build personal relations with Saudi Arabia and China whereas under the vision of a new Pakistan, Prime Minister Imran Khan has focused on development based on mutual respect and national interests.
The Saudi side has indicated that the capacity of proposed oil refinery will be between 250,000-300,000 bpd (11-13 million tons per annum). Whereas the cost of the refinery will be determined after the feasibility study. Initially both sides will study the feasibility of the proposed project after signing of the MOU.
Federal Minister said that Saudi technical teams have visited Gwadar and Karachi. He further added that the mega oil refinery will result in added benefits like reliability in fuel supply, import substitution and exports. It will enhance confidence of local and foreign investors.
There will be technology transfer, skill enhancement and human capital development and direct and indirect employment will be generated. The visiting side has also shown interest in Pakistan’s mines, minerals, fertilizers, phosphate and LNG storage capacity.
Moreover, the Saudi side has expressed strong interest in exploring investment opportunities in Pakistan’s petrochemical sector which was termed as a ‘game changer’ and would result in savings of $1.2 billion/annum in import substitution.
He further said that there are eight operating oil refineries in the country. The combined production of local refineries during FY 2018 remained 13.5 million tons/annum versus the consumption of the country at 26 million tons/annum in FY 2018.
The local refineries meet about 50% of the local demand. He further added that 8 other MoUs will also be signed, including in sectors like, mineral development, renewable energy resources, drug control and its smuggling, youth and sports, combating crime and cultural cooperation.