ISLAMABAD: Four Pakistani state-owned oil and gas companies on Thursday signed a Memorandum of Understanding (MOU) amid advance level negotiation with Saudi Arabia to execute a $10 billion green refinery project at the strategic Gwadar Port in Pakistan.
The project, expected to attract significant foreign investment from world-class oil and gas giants through equity participation, will be a joint venture between Oil and Gas Development Company Limited (OGDCL), Pakistan State Oil (PSO), Pakistan Petroleum Limited (PPL), and Government Holdings Private Limited (GHPL).
The signing ceremony was witnessed by Minister for State Musadiq Malik, and Secretary Petroleum, Capt (r) Muhammad Mahmood, who were present as chief guests.
In his address, Mussadiq Malik revealed that the Saudi Arabian oil firm has shown keen interest in injecting the entire equity into the multibillion-dollar refinery project. In response, the Pakistani government decided to form a joint venture with key state-owned companies in the country.
Under the proposed plan, PSO, OGDCL, PPL, and GHPL will collectively contribute 70 percent of the equity, while Aramco, the Saudi Arabian oil company, will initially inject 30 to 50 percent equity into the project.
State Minister Mussadiq Malik emphasized that the establishment of the Greenfield Refinery will play a pivotal role in reducing the country’s trade deficit. He highlighted the government’s achievements over the past year, including the addition of 138 Million Cubic Feet of natural gas worth $570 million to the gas system, with an additional $500 million of indigenous gas production to be integrated soon.
Furthermore, the minister mentioned that the benefits of the agreement signed with Russia for crude oil will soon be realized by the masses. He also informed the audience that negotiations are underway with friendly countries, such as Saudi Arabia, the United Arab Emirates, and other member countries of the Gulf Cooperation Council, to import affordable oil and gas to Pakistan.
The government has resumed talks on the Turkmenistan-Afghanistan-Pakistan-India Gas Pipeline project, previously shelved by the previous government, and signed a framework agreement with Azerbaijan for LNG procurement on flexible terms.
Under the agreement, Azerbaijan will offer one cargo of LNG each month, and Pakistan will have the option to accept or decline the cargo without facing any financial penalties.
Additionally, the government plans to establish schools and hospitals in regions where oil and gas exploration projects will be launched to support and facilitate the local population.
The envisioned project aims to create an integrated refinery petrochemical complex with a crude oil processing capacity of at least 300,000 barrels per day (BPD) along with a petrochemical facility in Pakistan. This complex will include various components such as marine infrastructure, a petrochemical complex, storage facilities for crude oil and refined products, pipeline connectivity, and more.
The signing of the MOU marks a significant step towards the realization of this ambitious green refinery project, which holds the potential to boost Pakistan’s energy sector and enhance its economic prospects.
