Saudi oil refinery in Gwadar to help Islamabad save $3 billion a year

A Saudi technical team, including Energy Minister Khalid Al-Falih, has visited Gwadar twice in recent months to examine the site for the refinery. (Twitter photo)
Updated 17 February 2019
0

Saudi oil refinery in Gwadar to help Islamabad save $3 billion a year

  • The refinery would produce up to 300,000 barrels per day once completed
  • Saudi Arabia is also setting up reservoirs for liquified natural gas in Pakistan, says Petroleum Minister Ghulam Sarwar Khan

ISLAMABAD: Pakistan expects to agree a deal to build an oil refinery and petrochemical complex at the Balochistani deep-sea Port of Gwadar, during the first state-level visit by Saudi Arabia’s Crown Prince Mohammed bin Salman.

The deal will see Pakistan join with Saudi Aramco to build the facility, expected to cost $10 billion.

“We are working on feasibility studies for the establishment of the oil refinery and petrochemical complex in Gwadar, and will be ready to start by early 2020,” Pakistan’s Minister for Petroleum Ghulam Sarwar Khan told Arab News on Thursday.

Once established, the project will help the South Asian nation cut its annual crude oil imports by up to $3 billion annually, in addition to creating thousands of job opportunities in the impoverished western province.

The country spends more than $16 billion each year on importing 26 million tons of petroleum products, including 800 million cubic feet of liquified natural gas (LNG) from Saudi Arabia, the UAE and other Gulf countries.

Khan claimed the refinery would produce up to 300,000 barrels per day once completed.

“The Saudi authorities have asked us to complete all the initial work on the project on a fast track, as they want to set it up as early as possible,” he said.

A Saudi technical team, including Energy Minister Khalid Al-Falih, has visited Gwadar twice in recent months to examine the site for the refinery, getting briefings from Pakistani officials on security in the area near the border with Iran.

“We will ensure complete security for Saudi investments and people working on the project. A detailed security plan has already been chalked up with help of the security agencies,” Khan added.

Pakistan currently has five oil refineries, but they can only satisfy half of its annual demand. Islamabad and Riyadh have long maintained strong ties, with the latter repeatedly offering the former financial assistance. Last year, the Kingdom guaranteed Pakistan $3 billion in foreign currency support for a year, and a further loan worth up to $3 billion in deferred payments for oil imports, to help stave off an economic crisis. The Islamic Republic also received $3 billion from the UAE to protect its foreign reserves.

Khan added that the Pakistani-Arab Refinery Co. (PARCO) was also setting up an oil refinery at Khalifa Point, near the city of Hub in Balochistan. 

“The work on this project is at an advanced stage. Land for it has been acquired and other formalities are being fulfilled,” he said.

Khan hopes the world’s perception of Pakistan will change upon completion of these deals, after years of war in the surrounding region. Exxon Mobil returned to Pakistan last month after 27 years, and started offshore drilling with $75 million of initial investments. 

“All results of the drilling are positive so far, and we expect huge oil and gas reserves to be discovered soon,” he said.

“More foreign companies are contacting us to invest in offshore drilling and exploration. Saudi Arabia is also setting up reservoirs for LNG in Pakistan. More Saudi investment will come to Pakistan with the passage of time.”


Japan to restrict foreign ownership in high-technology sectors

Updated 55 min 57 sec ago
0

Japan to restrict foreign ownership in high-technology sectors

  • Japan wants to prevent a leakage of technology deemed important for national security
  • The new rule will be applied to 20 sectors in information and communications industries

TOKYO: Japan’s government said on Monday that high-tech industries will be added to a list of businesses for which foreign ownership of Japanese firms is restricted.
The new rule, effective August 1, comes amid heightening pressure from the United States in dealing with cyber-security risks and technological transfers involving China.
The Japanese government made no mention of specific countries or companies that will be impacted by applying existing foreign ownership restrictions to the IT and telecoms industries.
The announcement came on the same day visiting US President Donald Trump and Japanese Prime Minister Shinzo Abe are holding talks in Tokyo on trade and other issues.
The United States has warned countries against using Chinese technology, saying Huawei Technologies could be used by Beijing to spy on the West. China and Huawei have strongly rejected the allegations.
“Based on increasing importance of ensuring cybersecurity in recent years, we decided to take necessary steps, including addition of integrated circuit manufacturing, from the standpoint of preventing as appropriate a situation that will severely affect Japan’s national security,” Japanese ministries said in a statement.
Japan wants to prevent a leakage of technology deemed important for national security or damage to defense output and technological foundation, they added.
The new rule will be applied to 20 sectors in information and communications industries, according to the joint statement by the finance ministry, trade ministry and communications ministry.
Under the foreign exchange and foreign trade control law, Japan brings certain industries such as airplanes, nuclear-related sectors and arms manufacturing under foreign capital controls.
The law requires foreign investors to report to the Japanese government and undergo inspection in case they buy 10 percent or more of stocks in listed Japanese companies or acquire shares of unlisted firms.
If the government finds any shortcomings, it can order foreign investors to change or cancel their investment plans.