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ISLAMABAD: Pakistan and the Kingdom of Saudi Arabia have engaged at an expert level to finalize the parameters of a state-of-the-art deep conversion refinery, which will be announced during the upcoming visit of Crown Prince Mohammed bin Salman.
In Abu Dhabi, talks are being held at the technical level to finalize the parameters of the new refinery to be installed by KSA. Prime Minister Sheikh Baz Sharif had earlier visited Saudi Arabia on October 24 for a two-day visit, where he set out to repair a memorandum of understanding worth $21 billion, including an earlier signing in February 2019. A $10 billion refining and petrochemical complex project.
However, under the new scenario, the petrochemical complex is no longer part of the project. Now the refinery will only be able to refine 350,000 to 400,000 barrels of crude a day, a senior official involved in the Abu Dhabi talks told The News.
“The Pakistani delegation was headed by the Minister of State, Mousadiq Masood Malik, and included the Minister of Petroleum, Secretary of the Investment Committee, MD PSO, MD PARCO and other sectoral officials from the oil sector. KSA was represented by the Saudi Minister of Energy and Saudi Aramco officials.”
“Both parties want to resolve all technical issues and parameters of this mega project. Saudi Aramco will be the main shareholder of the refinery in the country, and in addition, the refinery project will have many more stakeholders.”
The government has updated the draft refining policy for new refineries with 16% profitability, a 20-year tax holiday and a six-year protection tax. However, the Pakistani delegation is in open-ended policy negotiations with the KSA team, the official said. “If KSA asks for more incentives, Pakistan will not hesitate to consider and accept them.” The official said the new refinery will be able to export 35-40% of POL finished products, and the rest will be to meet the needs of the country.
He said Saudi Aramco had conducted a feasibility study and found it would not be feasible to build a refinery in Gwadar. However, it is also feasible if it is installed in Karachi or a Hub (Balochistan) also close to Karachi. China could also be part of the refinery, the official said.
The UAE government is hesitant to set up its Coastal Refinery (PCR-2) at the Hub, the official said, and the country wants KSA to make a major investment in the new refinery, with a capacity of 350,000-400,000 barrels per day and more stakeholders Participation in the project. The Pakistani delegation also held talks in Abu Dhabi with the Abu Dhabi National Oil Company, EDNOC, to meet the country’s energy needs.
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