KARACHI: Saudi Arabia has shown investment interest in Pakistan’s largest coastal refinery, a multibillion-dollar project being set up at Khalifa Point, near Hub, Balochistan, officials have confirmed.
“Saudis have shown an interest in coming into the project, if we require more equity for an even larger, scaled-up project — from 250,000 barrels to 400,000,” Sher Afghan Khan, spokesman for the Ministry of Energy (petroleum division) and board member of Pak-Arab Refinery Limited (PARCO), told Arab News on Sunday.
PARCO is implementing the PARCO Coastal Refinery project at Khalifa Point, a state-of-the-art refinery with a capacity of 250,000 barrels per day (over 11 million tons per annum).
The Pakistan government has allocated 1,811 acres of land for the establishment of PARCO Coastal Refinery, which is expected to be finalized by the end of June 2019. The project is expected to complete by the end of 2023.
“The project is proceeding as per schedule with no delays. The land is available and the boundary wall is under process,” Khan said.
PARCO is a 60:40 joint venture between the Government of Pakistan and the emirate of Abu Dhabi, through Mubadala Investment Company.
It is a fully integrated energy business engaged in oil refining, oil pipeline operations, and marketing of petroleum products.
“The UAE is very interested in investing in the coastal refinery project and also clearly committed to funding it,” said Khan.
Last week, Musabbeh Al-Kaabi, chief executive of the petroleum and petrochemicals division of Mubadala Investment, said an investment decision on Pak-Arab Refinery, a project that could cost up to $6 billion, would be finalized by the end of 2019.
“We are working with our Pakistani counterparts to progress on the engineering studies. We’re expecting a FID (final investment decision) in the near future. We’re targeting the end of 2019. The base plan is 250,000 bpd of oil and we’re talking about $5.5 to $6 billion,” Al Kaabi was quoted as saying by local media.
The refinery project will be managed and operated by the wholly owned subsidiary PARCO Coastal Refinery Limited. When completed, the facilities will comprise a modern, deep conversion refinery with a capacity of 250,000 barrels per day, supported by associated marine loading facilities. It will be Pakistan’s largest refinery and serve the rapidly growing domestic markets for refined products.
If it materializes, the Saudi investment in coastal refinery will be another significant venture into Pakistan’s energy sector.
Earlier, during the first foreign visit of Prime Minister Imran Khan to Saudi Arabia, the host country agreed to invest in the most modern oil refinery in Pakistan’s deep-water Gwadar port.
In the Gwadar refinery, Pakistan State Oil, a state-owned utility, will partner with Saudi state oil giant Aramco. Aramco will conduct the feasibility study of the Gwadar oil refinery project, Abdul Razak Dawood, adviser for commerce, textile, industry and production, and investment of Pakistan, recently told Arab News.
Analysts believe that the KSA’s substantial investment would largely benefit Pakistan’s petroleum-refining sector, which needs more foreign investment in terms of funds and expertise.
“It is indeed a positive development for Pakistan because due to shortage of refining capacity Pakistan also relies on the import of refined petroleum products to meet domestic demand,” said Saad Hashmey, senior analyst at Topline Securities.
Pakistan’s petroleum products’ demand in the fiscal year 2017-18 was 26.13 million tons, while 11.73 million tons were locally refined. The demand for oil is anticipated to hit 27 million tons by the fiscal year 2019-20, according to the Oil Companies Advisory Council, an umbrella organization of oil refineries and marketing companies.
At present Pakistan meets its 85 percent requirements through imports in the shape of crude and refined petroleum products, while indigenous crude oil meets only 15 percent of the country’s total requirements. The indigenous and imported crude is refined by six major and two small oil refineries.
KSA shows interest in Pakistan’s $6bn coastal refinery
KSA shows interest in Pakistan’s $6bn coastal refinery
- With Saudi investment, refining capacity could be scaled up from 250,000 to 400,000 bpd
- UAE to finalize investment decision about $6 billion by end of June 2019, Al Kaabi
At UNSC, Pakistan warns competition for critical minerals could fuel global conflict
- The demand for critical minerals has surged worldwide due to rapid expansion of electric vehicles, advanced electronics and clean energy technologies
- Pakistan’s representative says all partnerships in critical minerals sector must be ‘cooperative and not exploitative’ and respect national ownership
ISLAMABAD: Ambassador Asim Iftikhar Ahmad, Pakistan’s permanent representative to the United Nations (UN), has warned that intensifying global competition over critical minerals could become a new driver of global conflict, urging stronger international cooperation and equitable access to resources vital for the world’s energy transition.
The warning comes as demand for critical minerals and rare earth elements surges worldwide due to the rapid expansion of electric vehicles, advanced electronics and clean energy technologies, with governments and companies increasingly competing to secure supply chains while raising concerns that this may lead to geopolitical rivalries in the coming years.
Speaking at a Security Council briefing on ‘Energy, Critical Minerals, and Security,’ Ahmad said experience showed that the risks of instability increased where mineral wealth intersected with weak governance, entrenched poverty and external interference.
“Access to affordable, reliable and sustainable energy is essential for development, stability and prosperity. The global transition toward renewable energy, electric mobility, battery storage and digital infrastructure has sharply increased the demand for critical minerals,” he said.
“This upsurge has generated new geopolitical and geo-economic pressures. If not managed responsibly, competition over natural resources can affect supply chains, aggravate tensions, undermine sovereignty and contribute to instability.”
In several conflict-affected settings, he noted, illicit extraction, trafficking networks and opaque financial flows have fueled armed conflict and violence, weakened state institutions and deprived populations of legitimate revenues.
“The scramble for natural resources and its linkage to conflict and instability is therefore not new,” Ahmad told UNSC members at the briefing. “Pakistan believes that natural resources must serve as instruments of economic development and shared prosperity, and not coercion or conflict.”
He urged the world to reaffirm the right of peoples to permanent sovereignty over their natural resources, saying all partnerships in the critical minerals sector must be cooperative and not exploitative, respect national ownership, ensure transparent contractual arrangements and align with host countries’ development strategies.
“In order to prevent the exploitation of mineral-producing countries and regions, particularly in fragile and conflict-affected settings, support their capacity-building for strengthening domestic regulatory institutions, combating illicit financial flows, ensuring environmental safeguards, and promoting equitable benefit-sharing with local communities,” he asked member states.
“Promote equitable participation in global value chains. Developing countries must be enabled to move beyond extraction toward processing, refining and downstream manufacturing. Technology transfer, skills development and responsible investment are essential to avoid perpetuating structural imbalances.”
