Page 6 - MEOG Week 41

MEOG Commentary MEOG
UAE closes in on Pakistan
plant as pipeline deals
make progress
Downstream and midstream projects led by the UAE are gaining momentum, with progress having been made on a Pakistani refinery and ADNOC looking for bidders for a stake in its gas pipeline network.
Uae
What:
Progress is being made towards kicking off construction on a UAE-backed refinery in Pakistan.
Why:
ADNOC is diversifying downstream, having sold off a share in its domestic refineries and making investments in India and Indonesia.
What next:
Continuing with its busy year, ADNOC has put up for sale a stake in its domestic gas pipeline network.
PAKISTAN and the UAE are on the verge of launching construction of a new oil refinery in the South Asian country’s Balochistan Province, an official from the Middle Eastern oil producer has said.
UAE Ambassador to Pakistan hamad Obaid Ibrahim Salem Al-Zaabi told Arab News on October 4: “We are going to launch one of the biggest investments in a refinery project in hub very soon.”
he said the UAE’s Mubadala Petroleum, OMV and the two government’s Pak Arab Refin- ery (PARCO) joint venture would invest $5bn in the venture, with construction expected to begin before the end of the year.
Al-Zaabi said the parties involved were still hashing out the fine details of the project, which was the result of “extensive discussions” and many meetings.
he said a delegation from the UAE, headed by Mubadala CEO Musabbeh Al Kaabi, had met with Pakistani officials a few months ago and discussed the project in detail. “We are going to launchitverysoon,”Al-Zaabisaid.
The joint venture was agreed upon during Crown Prince Sheikh Mohamed bin Zayed Al Nahyan’s visit to Pakistan in January. “This project will show the strength of UAE-Pakistan relations and how the UAE is focusing on invest- ment in and future of Pakistan,” Al-Zaabi said.
Cash-strapped Pakistan is seeking partners to help it develop multi-billion dollar infrastructure projects that are beyond its financial means. The International Monetary Fund (IMF) approved a $6bn loan for the country in July while China, Saudi Arabia and the UAE have also signed off on $9bn in financial aid packages.
Pakistani Minister for Planning, Devel- opment and Reforms Makhdum Khusro Bakhtyar said on October 6 that Islamabad intended to hold high-level talks with Beijing on various hydropower, downstream and steel
manufacturing projects.
“All the existing projects under the CPEC
[China-Pakistan Economic Corridor] portfolio have been streamlined and there is no slowdown anywhere,” the minister told a press conference. Bakhtyar’s comments came a day before Paki- stani Prime Minister Imran Khan launched a three-day visit to Beijing.
CPEC’s development began in 2015 with the aim of creating an economic corridor between the two countries that would also connect a number of other South and Central Asian countries.
aDnoC moves
The move is indicative of Abu Dhabi’s overseas intentions. A deal was announced in late July for Abu Dhabi National Oil Co. (ADNOC) to col- laborate with Indonesia’s Pertamina throughout the value chain, and with talks apparently pro- gressing alongside Saudi counterpart Aramco to build a $60bn refining and petrochemicals mega complex in India, the Emirati firm is clearly on thefrontfoot.
2019 has been a busy year for ADNOC at home too, with the company making eye-catch- ing divestment moves in the downstream.
In January, Italy’s ENI and Austria-based, Abu Dhabi state-affiliated OMV signed share purchase agreements to acquire interests of 20% and 15% respectively in ADNOC Refineries for a combined total of around $5.8bn after the deduction of year-end 2018 net debt. ADNOC retains 65%.
The deal, which values business at around $19.4bn, is scheduled to close in the third quar- ter and covers the 837,000 barrel per day Ruwais refining complex in the Western Region and an ageing 85,000 bpd facility near Abu Dhabi City, as well as a 1,900-km pipeline network. The trio also agreed to establish a physical and derivatives trading JV incorporated at Abu Dhabi Global
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w w w . N E W S B A S E . c o m Week 41 15•October•2019