ISLAMABAD: Four Pakistani public entities have signed three memoranda of understanding (MOUs) to raise the necessary local equity for a multibillion-dollar Saudi refinery project and also inked an engineering, procurement and construction (EPC) contract with a Chinese firm, Pakistan’s minister of state for petroleum Dr. Musadik Malik said on Thursday.

The $12 billion Saudi project, with a capacity to process 350,000-450,000 barrels of crude oil per day, was initially agreed upon during a visit to Islamabad by Saudi Crown Prince Mohammed bin Salman in 2019.

Pakistan State Oil (PSO), Oil and Gas Development Company Limited (OGDCL), Pakistan Petroleum Limited (PPL), and Government Holdings Private Limited (GHPL) signed three MOUs to raise the required local equity, while the EPC agreement was inked with China National Offshore Oil Corporation (CNOOC) and Pakistan’s Monarch International.

“In our earlier discussions [with Saudi authorities] there were two issues, one was obviously, who are the other equity partners, so Pakistan firmly believed that if Pakistan thinks that this is a viable project, then Pakistan should put its own equity into the project,” Malik told Arab News on the sidelines of the MOU signing ceremony.

“So, we have put together equity partnerships in excess of 40 to 45 percent as of right now.”

Pakistan, Saudi Arabia and Aramco were “honored partners” and had held many rounds of talks to reach an agreement on the way forward, Malik said.

“As I said, we are in the final stages, means we basically are at the spreadsheet level, trying to take out all the wrinkles that are there or that are possible, so that a world-class refinery of about 300,000 barrels can be set in Pakistan,” he added.

“PSO is taking the lead in local equity with 25 percent and other firms also committed 5 to 10 percent which makes our equity share more than what is required.”

Malik said the Pakistan government had brought in the best Chinese company for the purpose of EPC contracts.

“We have already brought to the table world-class refinery EPC construction partners who are also going to take a position in the equity,” he said.

Malik added that after the announcement of the new refinery policy, the government had also initiated talks with the United Arab Emirates (UAE) and Azerbaijan for investment in the sector.