Page 8 - DMEA Week 17 2022
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DMEA REFINING DMEA
Two locations still under consideration
for Aramco’s Pakistan refinery
MIDDLE EAST PAKISTAN revealed this week that Gwadar and likely be developed in a joint venture with Islam-
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 meeting nomic viability and technical feasibility due to its
this week to discuss the refining project, presided close proximity to the Karachi Port Trust (KPT)
over by deputy chairman of the Planning Com- and requiring considerably lesser distance for
mission, Mohammad Jehanzeb Khan. deep-water [single-point mooring (SPM)] as
Meanwhile, local reports suggested that compared to that for Gwadar”.
arrangements would be made for LNG to be It was suggested at the time that the Pakistani
transported to Pakistan from Saudi Arabia – a authorities re-engage with their Saudi counter-
noteworthy thread given that Riyadh has no liq- parts to move the project forward under the
uefaction capacity at all. terms of the Oil Refinery Policy 2021, which
During the meeting, the Petroleum Division seeks to incentivise project economics amid
said that the two locations had been identified weak investor interest. Speaking to Nikkei Asia
and offered to Saudi Aramco, noting that the in June 2021, a Pakistani official said that the
Pakistani side should choose the location that development of the refinery was never feasible.
best matches the Saudi firm’s preferences. “Gwadar can only be a feasible location of an
Plans for a 250,000-300,000 barrel per oil refinery if a 600-km oil pipeline is built con-
day (bpd) greenfield refinery at Gwadar were necting it with Karachi, the centre of oil supply of
included in an early 2019 pledge by MbS to invest the country.” Karachi is currently only connected
$20bn in Pakistan’s energy and mining sector. to the north of Pakistan, not the east.
The size of the refinery may now have altered, He added: “Without a pipeline, the transport
with Azhar saying in January that capacity would of refined oil from Gwadar [via road in oil tank-
be 300,000-400,000 bpd, though the budget is ers] to consumption centres in the country will
understood to remain 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.
P8 www. NEWSBASE .com Week 17 28•April•2022
