Islamabad : Four Pakistani state-owned petroleum companies have signed a memorandum of understanding with Saudi Arabia to build Pakistan’s largest oil refinery with an investment of $10 billion in the strategic Gwadar port, according to a media report on Friday. The MoU to set up the facility with a production capacity of 300,000 barrels per day was signed on Thursday, the Dawn newspaper reported. The companies would join the project through equity participation.
The government headed by PM Shehbaz Sharif is reportedly in the advanced stages of negotiations with Saudi giant Aramco to execute the greenfield refinery project at the strategic Gwadar port and wants to complete the initial paperwork before its tenure ends on August 14.
To facilitate the Saudi investment in refining, the government has recently passed a new policy under which a new deep conversion oil refinery of aminimum of 300,000 bpd achieving financial close of the project within five years shall be eligible for a customs duty of 7. 5 per cent for 25 years on petrol and diesel of all grades produced effective from the date of commissioning of the refinery. The project envisions setting up an integrated refinery petrochemical complex with a crude oil processing capacity of a minimum 300,000 bpd along with a petrochemical facility.