The Federal Board of Revenue (FBR) on Monday notified a 20-year tax holiday for Khalifa Coastal Refinery (KCR), paving the way for signing implementation agreement (IA) by the Petroleum Ministry and Abu Dhabi''s International Petroleum Investment Company (Ipic) plus Aramco''s joint venture.
A high-level Ipic delegation had arrived Islamabad on November 12 to sign IA with the government authorities. Prime Minister Shaukat Aziz will witness the signing of IA.
Sources said the FBR issued five notifications for Khalifa Coastal Refinery''s concessions in tax regime till Monday night. The FBR and petroleum ministry officials held a series of meetings to finalise the package of tax holiday for the Khalifa Coastal Refinery and finally agreed for waiving of all taxes payable to the government under different taxes and duties. Under the tax holiday regime, the Khalifa Coastal Refinery, a $4 billion joint project, will get concession of repatriation of all income and capital gains outside Pakistan without any tax liability. It will remain exempted from Workers Participation Fund and Workers Welfare Fund WPF/WWF. It also enjoys exemption from development charge of 0.5 percent as per EPZA rules for 20 years.
The Khalifa Coastal Refinery project is bringing huge investment in underdeveloped area with potential to become an industrial hub in future. It would be connected with existing POL distribution network.
Its target capacity is 200,000 to 300,000 barrels per day (bpd) and its petroleum products would be based on ''Euro IV'' specifications for improving environmental standards besides, ensuring the products to be easily traded on the international market.
Crude oil tankage for the refinery is estimated in the range of 500,000 and 600,000 tonnes. It would have single-point mooring (SPM) with sub-sea pipeline for crude unloading and product loading operations. The capacity of SPM is expected to handle about 1.5 million tonnes per month.
The Khalifa Coastal Refinery will provide direct employment to 1,500 professionals and indirect employment to 3,000 semi-skilled and manual labourers. The direct/indirect employment during construction phase is estimated around 10,000 people. It would bring socio-economic benefits to locals/area besides, establishing strategic infrastructure in Pakistan.
It will have operation and maintenance service business for Pakistani companies besides, developing other ancillary and support industry around the refinery complex.
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