SIFC wants to know if Aramco’s interest in refinery project persists

ISLAMABAD: The Apex Committee (AC) of the Special Investment Facilitation Council (SIFC) has directed Pakistan’s ambassador to Saudi Arabia to approach Saudi Aramco Refinery Project regarding current status of their interest in the refinery project, well informed sources told Business Recorder.

The AC also directed the Petroleum Division to assess the investment interest of other parties also in the project.

Regarding requirement in Brown/ Green Field refinery sector, Petroleum Division intimated that there will be a gap between local refining production and projected demand of petroleum products of around 9 Million Tons Per Annum (MTPA) by 2030. It will increase to 14 MTPA by 2035.

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Pakistan currently imports 50 percent of its Mogas (petrol) and High Speed Diesel (HSD) requirement. Annual increase in requirements of Mogas and diesel is projected at 4 percent and 2.7 percent, respectively.

SIFC has been apprised that there will be a need of one new refinery of around 350,000 bpd (15 MTPA) which may be configured in such a way as to maximise Mogas production.

It was also informed that Grace Refinery Limited (GRL) and Falcon Oil Refinery (Pvt) Limited have expressed interest in refinery project.

A Committee comprising representations from Oil and Gas Regulatory Authority (OGRA) , Petroleum Division and Pakistan State Oil (PSO), besides a Refinery Expert, has been notified to hold in-depth evaluation of the proposals. The results of the evaluation process by the Committee will be presented in the next Executive Committee (EC) of the SIFC.

Secretary Petroleum has been directed to provide an update on decisions of the Cabinet Committee on Energy (CCoE) regarding policy amendments to remove hurdles from Brownfield investors and to approve revised timelines for the execution of upgraded agreements between the refineries and OGRA and present these in the next EC.

According to the sources, Final Investment Decision (FID) of Energas LNG Terminal is subject to completion of the following outstanding matters; (i) signing of GTA with SNGPL; (ii) exemption from Third Party Access and; (iii) 5- Year FBR tax exemption.

Petroleum Division has been directed to finalise draft amendments for exemption from Third Party Access for legislative changes .

The SIFC was further informed that federal government contributes a subsidy of around Rs 20 billion on LNG for fertiliser plants. Provinces must contribute by sharing the burden of this subsidy, agriculture being a provincial subject.

It was decided that two committees will be established to devise firmed up recommendations on the matter, which may be presented in the next EC for devising sharing mechanism of LNG subsidy for current year and for gas pricing reforms in fertilizer sector.

The Executive Committee was further briefed that there was inclusion of TAPI in Foreign Investment Promotion and Protection Act (FIPPA) 2022, and commercial and legal experts have been engaged to evaluate the alignment of existing commitments under Gas Pipeline Framework Agreement (GPFA) and Host Government Agreement (HGA) with the incentive package under FIPPA. Petroleum Division has been directed to conclude all agreements by December 31, 2023.

Secretary Petroleum is tasked to present updated status of Reko Diq regarding ongoing evaluation process with Manara minerals and draft infrastructure plan for Chagai-Gwadar Corridor to be presented in the next EC meeting.

Copyright Business Recorder, 2024