Saudi's $10bn oil refinery to revolutionize Pakistan's energy industry, experts say

Saudi delegation led by Energy Minister Khalid Al-Falih discuss prospects of oil refinery and development of Gwadar port with their Pakistani counterparts in a meeting held in Gwadar on Saturday, Jan. 12, 2019. (Saudi embassy in Pakistan-Twitter account)
Updated 15 January 2019

Saudi's $10bn oil refinery to revolutionize Pakistan's energy industry, experts say

  • Riyadh plans to construct petrochemical complex which will house the facility
  • Analysts say move will help develop downstream sector in the country

KARACHI: Pakistan and Saudi Arabia are expected to start working on a proposed oil refinery, worth more than $10 billion within the next 18 months, which would reduce the country’s dependency on expensive oil imports and boost its petrochemical sector, Saudi Energy Minister told journalists in Balochistan on Saturday.

Khalid Al Falih, who led the Saudi delegation during a recent visit, said that representatives from both sides discussed a number of projects and opportunities for investment in Pakistan.

“It was continuation of discussions we had in Islamabad few months back with the honorable prime minister [Imran Khan],” Al Falih said during his visit to Gwadar on Satuday. 

“We also discussed projects with Saudi Aramco, the feasibility of a big refinery and petrochemical projects here in Gwadar or elsewhere in Pakistan, but I prefer Gwadar because Gwadar is at a strategic location and is close to the Kingdom of Saudi Arabia. It will be connecting not only the urban centers of Pakistan but the region where petrochemicals are short in supply as well," he said.

During the meeting both sides also discussed investment opportunities in the renewable energy, power generation, and mining sectors. 

"We discussed opportunities for product supply, refining products as well as fertilizer exports from the Kingdom as well as investing in the  manufacturing sector in Pakistan,” Al Falih said, adding that "these kind of projects take time". 

"It would be within 18 months that we actually move from studies and feasibilities, and frontal engineering to implementation. However, a lot of things have to happen from both sides including from the Pakistani government," he added.

On his arrival in the deepsea portcity of Gwadar on Saturday, Al Falih also inspected the site of the proposed oil city where Saudi Aramco is planning to build a petrochemical complex which will house the oil refinery at an expected investment of more than $10 billion.

“If we make the refinery work, it would be above $10 billion, especially if we integrate with petrochemical manufacturing for ethylene and propylene value will have the highest impact,” he said.    

Earlier, Haroon Sharif, Chairman of Pakistan Board of Investment, had said that the "overall direction of the MoUs have been agreed upon and will be signed at the appropriate time”.

“I am expecting around $15 billion investment from Saudi Arabia in the next three years. The inflow of investments for the oil refinery and petrochemical complex in Pakistan is estimated to be between $6 billion to $10 billion,” Sharif said.

Al Falih added that: "We will have all reasonable and enabling terms to make this project profitable and bankable. Once we do that, Saudi Aramco and Saudi Arabia will push to accelerate”.

Considering the fact that it's a longterm project, experts say that the oil refinery would take eight to 10 years to materialize but, once ready, it will revolutionize Pakistan's energy industry. 

“It would have a great impact. Pakistan needs these projects because the country imports a variety of finished products. Besides, it could resolve thr issue of furnace oil by deep conversion. This would be a good and positive step,” Asim Murtaza, Chief Executive Officer of Petroleum Institute Pakistan, told Arab News.

Pakistan imports around 60 percent of petroleum products from different countries which would be substituted with local production once the refinery is operational. “Pakistan would be able to save around $1.5-$2 billion foreign exchange on imports by only importing crude and making by-products in the country,” Samiullah Tariq, Head of research at Arif Habib Limited, told Arab News.

“This will happen when the refinery is operational," Tariq said, adding that the "proposed petrochemical complex would develop non-existent petrochemical industry in Pakistan with the production of polyethylene and polypropylene. This would boost the plastic and petrochemical industry in the country”.

Pakistan is hoping to attract more than $40 billion in foreign direct investment, in the next five years.

“We estimate that roughly around $40 billion investment will be made by these three countries (Saudi Arabia, the UAE, and China) during the next three to five years,” Sharif had said in a previous interview with Arab News.

Sharif's doctor warns of 'life threatening' cardiac, renal conditions if ignored

Updated 54 sec ago

Sharif's doctor warns of 'life threatening' cardiac, renal conditions if ignored

  • His kidney disease is at stage 3 with kidney function further deteriorating, claims daughter
  • Punjab government spokesman says Sharif’s health stable, government providing all necessary medical facilities

LAHORE: The personal physician of former Pakistani Prime Minister Nawaz Sharif on Monday said that Sharif was at the risk of developing “life threatening” cardiac and renal conditions even as a spokesman for the Punjab government said the jailed ex-premier’s health was stable and he was receiving the necessary medical attention.

Sharif is currently serving a seven-year sentence imposed last year for failing to disclose the source of income that allowed him to acquire the Al-Azizia Steel Mills in Saudi Arabia. He has appealed.

“The medical condition of Mian Nawaz Sharif is worsening,” his personal physician Dr. Adnan Khan told Arab News. “Turning a blind eye to the situation and [having a] callous attitude towards his health can lead to life threatening health issues, cardiac and renal both,” he said.

Sharif’s daughter Maryam Nawaz has tweeted several times in recent days demanding that he be treated by doctors of his choice.

“Just got back after meeting MNS [Mian Nawaz Sharif],” she said in a Twitter post on March 23. “His doctor’s concern was not unfounded. The blood tests done yesterday reveal a further raise in his CREATININE levels which means his kidney function has deteriorated. His kidney disease is already at stage 3. The pain in the flanks persists.”

Dr. Shahbaz Gill, a spokesman for the Punjab government, denied that Sharif was being neglected by authorities and said his health was stable.

“The health condition of Mian Nawaz Sharif was satisfactory and the government was providing every possible facility to him,” Gill said in a video message on twitter. “He (Nawaz Sharif) always has a choice to get examined by any doctor in any hospital of Pakistan at any time.”

A urologist appointed by the Punjab government to examine the jailed former prime minister said in his report: “All lab investigations are within normal limits.”

The Punjab Minister for Health, Dr. Yasmeen Rashed, has also said reports pertaining to Sharif’s kidneys were “okay.”

Last month, Sharif was sent back to jail from the Services Hospital in Lahore after he refused to be shifted to any of the three health facilities offered by the Punjab government.

Members of the ruling Pakistan Tehreek-e-Insaf party accuse the Sharif family of using Sharif’s health as a ruse to get him out of the country. However, the family has been insisting for weeks that he is seriously ill and not receiving the necessary care.

On Monday, while speaking to journalists in Islamabad, Prime Minister Imran Khan asked why the Sharifs, who had ruled the country in the center and the Punjab province for decades, did not "build one hospital where they themselves could be treated," criticizing the former premier's demand of getting medical treatment in London.