KARACHI: Pakistan and Saudi Arabia are discussing the “viability” of returns on the investment to be made in a $10 billion Aramco oil refinery proposed to be set up in Pakistan, the Pakistani Prime Minister’s Commerce Adviser has said, categorically denying that the project has been shelved.

The Saudi energy minister announced in January 2019 that Saudi Arabia planned to set up a $10 billion oil refinery in Pakistan’s deep-water port of Gwadar. The refinery is meant to have 250,000-300,000 bpd oil refining capacity and a $1 billion petrochemical complex.

However, Tabish Gauhar, the Pakistani PM’s assistant on power and petroleum, recently told media Saudi Arabia would not install the refinery at Gwadar and that the project may be moved elsewhere in Pakistan, possibly to the port city of Karachi. The comments sparked rumors the project had been shelved, which the commerce adviser categorically denied.

“It is an issue of viability,” Abdul Razak Dawood told Arab News in an exclusive interview this month. “Is it feasible to put up such a huge refinery in Pakistan?“

“Pakistan is very keen [on getting the refinery] but there has been a lot of discussion looking at the viability,” the adviser added. “These are huge projects, and we have to make sure that they are on sound footing. Because Saudi investors [are] coming into Pakistan, we want to make sure that they ... get good return on their investment.”

Early this year, Shahzeb Khan Kakar, the director general of Gwadar Development Authority (GDA), told Arab News the authority was planning a mega ““oil city” to be developed on 80,000 acres in Gwadar District to refine and process imported petroleum products for local and regional needs. 

Saudi Aramco declined comment for this story. Tablish Gauhar also did not respond to Arab News queries related to the future of the proposed Gwadar oil city and refinery. 
Dawood, however, categorically denied that the project had been “shelved,” saying discussions were ongoing.

“There is a lot to be discussed yet ... it is not shelved, we are still discussing it,” he added. 

Experts say expediting such mega projects should be done on priority and their progress monitored directly by Prime Minister Imran Khan. 

“Such projects should be separated from regular projects and should be treated as priority projects,” Haroon Sharif, a member of the Prime Minister’s Task Force on Economic Diplomacy and a former chairman of the Board of Investment, told Arab News on Tuesday. “For such priority mega projects, a separate unit must be set up in the PM house comprising 5-6 experts who should submit progress reports directly to the PM.”