The Greenfield Refinery project, worth USD 10 billion, is about to take-off. It is a joint Saudi-Pakistan project at the Gawadar deep sea port.
The partners are the Saudi Aramco, and the Pakistan’s Oil and Gas Development Company Limited (OGDCL), Pakistan Petroleum Limited (PPL), Pakistan State Oil (PSO) and Government Holdings Private Limited (GHPL).
The integrated refinery petrochemical complex will have a processing capacity of a minimum of 300,000 barrels per day (BPD).
The MoU for the project was signed on 27 July 2023.
The refinery, which will produce 8 million tonnes of diesel and 6 million tonnes of gasoline with Euro 5 specifications per year, will be established under the newly approved green refinery policy that offers incentives such as a 7.5% deemed duty for 25 years and a tax holiday of 20 years.
The project will be financed on a 30:70 equity-loan ratio, with Pakistan and Saudi Aramco each contributing 15 per cent of the equity. Saudi Aramco, one of the world’s biggest oil companies, will lead the project in arranging the loans. Saudi Aramco would provide $1.5 billion as equity and the same amount would be arranged from Pakistan.
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In addition to meeting the requirements of Pakistan for the refined fuel and downstream products, it will have the following benefits:
- It will raise the viability of continued and increased supply of the Russian oil (Urals) for processing and onward supply to inland or overseas markets.
- It will speed up the negotiations to bring the oil from Central Asia for refining and onward export to the ready markets in Asia.
- It will contribute significantly to the energy security for the larger region.
- It may encourage more settlements in mutual currencies.
As we have mentioned in some of our earlier reports, CAPS (Central-Asia-Pakistan-Seas) is a natural zone of economic partnership. It is a concept rather than a rigidly defined zone and it generates its own steam to move forward. It is a force of nature. /// nCa, 28 July 2023
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