Pre-feasibility of $10 bln Saudi oil refinery to be ready by October, Pakistan says

KARACHI: Pakistan and Saudi Arabia are all set to complete by October 2019 the pre-feasibility study for a multi-billion dollar oil refinery and petrochemical complex in Pakistan’s deepwater port of Gwadar, the chairman of the Pakistani board of investment said on Tuesday.
In February, Crown Prince Mohammed bin Salman said he had signed investment agreements worth over $20 billion during a high-profile visit to Pakistan, including for the $10 oil refinery.
A pre-feasibility study will set the future course of action for the construction of the mega project, Haroon Sharif, the chairman of the Pakistan Board of Investment, told Arab News.
“The work is in progress. A Pakistani technical team visited the Kingdom last month and decided steps and timeline,” he said. “By October this year we will complete the pre-feasibility study. Both sides have agreed on the course of actions at their ends … who will conduct what part of the study ... how teams and steering committee will be constituted.”
Setting up the oil refinery and $1 billion petrochemical complex is at the top of the Saudi investment agenda for Pakistan. To push the project forward, a facilitation unit has been set up at Pakistan State Oil House in Karachi.
“International consultants have been hired for the study,” Sharif said. “They will explore everything from a refining capacity of 300,000 barrel per day bpd to petrochemical complex. After completion of the pre-feasibility study, we will decide about the future course of action and proper feasibility will be made.”
Last month, a Pakistani technical team participated in a workshop arranged by Saudi Aramco.
“Similarly, a Saudi team is due in Pakistan after Eid next month to further discuss project details,” the board of investment chairman said.
Groundwork on the project is expected to start within 18 months after the completion of the feasibility study. The whole project will take 3-5 years from inception to commissioning.
Pakistan currently imports more than 50 percent of petroleum products, which it aims to substitute with local production once the Gwadar refinery starts production. Analysts expect that the country would be able to save around $2 billion annually on the import of crude once the project comes online.
Pakistan wants to attract investment and other financial support to tackle a soaring current account deficit caused partly by rising oil prices. Last year, Saudi Arabia offered Pakistan a $6 billion package that included help to finance crude imports. Last week, the country signed a $6 billion bailout deal with the International Monetary Fund.
Beijing has pledged $60 billion as part of the China Pakistan Economic Corridor (CPEC) that involves building power stations, major highways, new and upgraded railways and higher capacity ports, to help turn Pakistan into a major overland route linking western China to the world.
In Gwadar, China is building a strategic port on the Arabian Sea.

Pre-feasibility of $10 bln Saudi oil refinery to be ready by October, Pakistan says