ISLAMABAD: Pakistan is expecting to sign two memoranda of understanding (MoUs) for an oil refinery and petrochemical complex in the port city of Gwadar during the visit to Islamabad of Saudi Crown Prince Mohammed bin Salman on Saturday, the Pakistani petroleum minister said on Friday.
The deals will see Pakistan join hands with Saudi Aramco, the world’s top oil producer, to set up a state-of-the-art facility worth $10 billion, with a groundbreaking ceremony expected to be performed early next year.
The crown prince is due to arrive in Islamabad on February 16 on a two-day visit that is being seen as the seal on already strong ties between the historic allies. He is expected to sign a range of agreements worth up to $15 billion dollars, including for three power plants in Pakistan’s Punjab province and the oil refinery and petrochemical complex in the impoverished southwestern province of Baluchistan. .
“We are working with full speed on technical and feasibility studies for establishment of the oil refinery and petrochemical complex in Gwadar … and will perform the groundbreaking by early 2020,” Minister for Petroleum Ghulam Sarwar Khan told Arab News in an interview. 
Once established, the project would help the South Asian nation cut its annual crude oil imports by up to $3 billion, in addition to creating thousands of jobs in Baluchistan province.
The country spends more than $16 billion each year on importing 26 million tons of petroleum products, including 800 million metric cubic feet Liquefied Natural Gas (LNG) from Saudi Arabia, the United Arab Emirates and other Gulf countries to fulfill its energy needs and cut its import bill.
Giving details about the proposed oil refinery, the minister said that it will have a per day capacity of 250,000 to 300,000 barrels per day and cost over $10 billion. 
“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.
Saudi technical teams, including Energy Minister Khalid Al-Falih, have visited Gwadar twice in recent months to examine the site for the oil refinery and petrochemical complex. They have also been briefed by Pakistani officials on security, and law and order in the area bordering Iran.
“We will ensure complete security of Saudi investment and people working on the project … and a detailed security plan for it has already been chalked out with help of the security agencies,” the minister said.
Pakistan currently has five oil refineries that fulfill half of its demand while the remaining is fulfilled through imports
Pakistan and Saudi Arabia have long maintained strong ties and Riyadh has repeatedly come to Islamabad’s financial rescue. Last year, the Kingdom offered 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 a current account crisis.
Khan said that the Pak-Arab Refinery Company (Parco) of the UAE was also setting up a separate oil refinery at Khalifa Point, near Hub in Balochistan province. 
“The work on this project is in the advanced stage now as land for it has been acquired and other formalities are being fulfilled expeditiously,” he said.
Exxon Mobil returned to Pakistan last month after 27 years and has started offshore drilling with $75 million initial investments, the minister said, adding: “All results of the drilling are positive so far and we expect huge oil and gas reserves to be discovered soon. More foreign companies are contacting us to invest in offshore drilling and exploration as we are offering them lucrative incentives.”
About the energy mix, he said the country was importing around 800 million metric cubic feet worth $3 billion and wanted to add more 200 mmcf in the next few months to meet increasing demand. 
“Saudi Arabia is also interested in setting up reservoirs for LNG in Pakistan …. this is an ongoing economic cooperation between the two brotherly countries and more Saudi investment will come in Pakistan with the passage of time,” the minister added.