Page 11 - DMEA Week 03 2022

DMEA REFINING DMEA

Minister provides update on

Aramco’s Pakistan refinery

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

Week 03 20•January•2022 www. NEWSBASE .com P11