Page 11 - AsianOil Week 17 2022

AsianOil COMMENTARY AsianOil

Two locations still under consideration

for Aramco’s Pakistan refinery

PROJECTS & PAKISTAN revealed this week that Gwadar and likely be developed in a joint venture with Islam-
COMPANIES Hub, both in Balochistan, are still under consid- abad-owned Pakistan State Oil.
eration as the location for a joint refining project Following a pre-feasibility study conducted
with the state oil firm of Saudi Arabia. by Advisian that considered Gwadar and Hub,
The announcement comes ahead of a visit to the project site was moved to the latter, which
the Kingdom by Pakistani Prime Minister Sheh- is located around 25 km north-west of Karachi.
baz Sharif, where he is likely to meet with Crown The latest update casts confusion over
Prince Mohammed bin Salman (MbS) to discuss recent comments by Pakistan’s Energy Minister
topics such as politics and security; energy; and Muhammad Hammad Azhar, who said in Janu-
afforestation/climate change. ary that Hub had been selected “based on its eco-
Pakistan’s Petroleum Division held a meet- nomic viability and technical feasibility due to its
ing this week to discuss the refining project, close proximity to the Karachi Port Trust (KPT)
presided over by deputy chairman of the Plan- and requiring considerably lesser distance for Karachi is
ning Commission, Mohammad Jehanzeb Khan. deep-water [single-point mooring (SPM)] as
Meanwhile, local reports suggested that arrange- compared to that for Gwadar”. currently only
ments would be made for LNG to be transported It was suggested at the time that the Pakistani
to Pakistan from Saudi Arabia – a noteworthy authorities re-engage with their Saudi counter- connected to the
thread given that Riyadh has no liquefaction parts to move the project forward under the
capacity at all. terms of the Oil Refinery Policy 2021, which north of Pakistan,
During the meeting, the Petroleum Division seeks to incentivise project economics amid not the east.
said that the two locations had been identified weak investor interest.
and offered to Saudi Aramco, noting that the Speaking to Nikkei Asia in June 2021, a Paki-
Pakistani side should choose the location that stani official said that the development of the
best matches the Saudi firm’s preferences. refinery was never feasible. “Gwadar can only be
Plans for a 250,000-300,000 barrel per a feasible location of an oil refinery if a 600-km
day (bpd) greenfield refinery at Gwadar were oil pipeline is built connecting it with Karachi,
included in an early 2019 pledge by MbS to the centre of oil supply of the country.” Karachi
invest $20bn in Pakistan’s energy and min- is currently only connected to the north of Paki-
ing sector. The size of the refinery may now stan, not the east.
have altered, with Azhar saying in January He added: “Without a pipeline, the transport
that capacity would be 300,000-400,000 bpd, of refined oil from Gwadar [via road in oil tank-
though the budget is understood to remain ers] to consumption centres in the country will
around $10bn. be very expensive,” adding that he does not see
Aramco had been due to supply the bulk Gwadar’s infrastructure issues being resolved
of the crude feedstock for the facility, which is within the next 15 years.™

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