Saudi Arabia to set up $12 billion refinery, petrochemical complex in Pakistan

The government has convinced Saudi Arabia to resume a significant project to build a cutting-edge deep conversion refinery and petrochemical complex in Pakistan.

A high-ranking team from the kingdom led by Crown Prince Mohammad Bin Salman will visit Pakistan in the final week of November, when a formal announcement is anticipated in this regard, according to a top official at the Energy Ministry.

According to Geo, the Pakistani government reportedly made a tremendous effort to convince the kingdom to uphold the memoranda of understanding and invest in Pakistan. Riyadh and Washington are at odds over a reduction in the supply of oil on the world market, and Islamabad has thrown its support behind Riyadh in this dispute.

Saudi Arabia signed MoUs in February 2019 during Mohammad Bin Salman’s visit to Pakistan for an investment of $21 billion in a number of economic sectors, including the $12 billion deep conversion refinery and petrochemical complex project.

At this regard, the Saudi oil tycoon Aramco also carried out research, which concluded that building a refinery in Gwadar was not practical. However, the official claimed that it may be erected in Hub, Balochistan, or close to Karachi.

Later, the insider claimed, when relations between Imran Khan’s administration and Saudi Arabia became tense, the kingdom’s top leaders essentially put $21 billion in MoUs on hold that had been inked in February 2019.

According to the source, the Ministry of Petroleum is currently updating the draught for the refining policy in order to attract investment for the construction of new refineries.

In addition to broadening the tax holiday’s application, the government is considering offering investors profitability at 14–15% instead of the 9% that was previously promised in the PTI administration’s plan for policy refinement.