Page 8 - AsianOil Week 03 2022

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Minister provides update on

Aramco’s Pakistan refinery

PROJECTS & PAKISTAN Energy Minister Muhammad Ham- a pre-feasibility study conducted by Advision.
COMPANIES mad Azhar last week told the country’s Senate He said that Hub was selected “based on its eco-
that there has still not yet been any progress on a nomic viability and technical feasibility due to its
planned $10bn refinery near Karachi backed by close proximity to the Karachi Port Trust (KPT)
the Saudi state. and requiring considerably lesser distance for
Azhar told a Senate meeting that the refinery deep-water [single-point mooring (SPM)] as
project’s steering committee had not met since compared to that for Gwadar,” according to the
July 2020, when doubts were cast about its future local DND media outlet.
amid oil price and global economic uncertainty. Speaking to Nikkei Asia in June 2021, a Paki-
It was suggested that the Pakistani authori- stani official said that the development of the
ties re-engage with their Saudi counterparts to refinery was never feasible. “Gwadar can only be
move the project forward under the terms of the a feasible location of an oil refinery if a 600-km
Oil Refinery Policy 2021, which seeks to incen- oil pipeline is built connecting it with Karachi, The country’s
tivise project economics amid weak investor the centre of oil supply of the country.” Karachi
interest. is currently only connected to the north of Paki- upstream
Azhar said that the timeline could then be stan, not the east.
updated, but noted that the development of the He added: “Without a pipeline, the transport production is
refinery would take nearly five years to complete of refined oil from Gwadar [via road in oil tank-
from the point of work resuming. ers] to consumption centres in the country will running at just
Plans for a 250,000-300,000 barrel per day be very expensive,” adding that he does not see under 100,000
(bpd) greenfield refinery at the western port of Gwadar’s infrastructure issues being resolved
Gwadar were included in an early 2019 pledge within the next 15 years. bpd and Aramco
by Saudi Arabia’s Crown Prince Mohammed Pakistan suffers from an oil products short-
bin Salman (MbS) to invest $20bn in Pakistan’s fall – the capacity of the six existing refineries, is already the
energy and mining sector. The size of the refin- including one part-owned by the Abu Dhabi
ery may now have altered, with Azhar noting a government, stands at 400,000 bpd against second-largest
capacity of 300,000-400,000 bpd. domestic consumption of around 600,000 bpd. crude supplier.
Aramco had been due to supply the bulk Azhar noted that imports account for 70% of
of the crude feedstock for the facility, which is gasoline demand and 50% of diesel demand,
likely be developed in a joint venture with Islam- adding that the planned refinery could save
abad-owned Pakistan State Oil. around $450mn.
The location of the facility was shifted to the The country’s upstream production is run-
coastal city of Hub in Balochistan, around 25 km ning at just under 100,000 bpd and Aramco is
north-west of Karachi. Azhar said that Gwadar already the second-largest crude supplier after
and Hub were the two locations considered in the UAE.™

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