Feasibility study for crude to chemical refinery: Trilateral MoU may be signed during PM’s visit to China

ISLAMABAD: A trilateral non-binding Memorandum of Understanding (MoU) is likely to be signed on preparation of feasibility study for crude to chemical refinery during the visit of Prime Minister Shehbaz Sharif to China next month, well-informed sources told Business Recorder.

Prime Minister, sources said, has issued instructions to Minister for Petroleum, Secretary SIFC (Special Investment Facilitation Council), Pakistan’s ambassador to China and Saudi Arabia in the light of his meeting with Saudi Minster for Energy Prince Abdulaziz bin Salman during his recent visit to Saudi Arabia.

The sources said Saudi oil giant M/s Aramco will prepare the MoU between Pakistan, China and Saudi Arabia.

Pakistan State Oil (PSO) has already initiated talks with Chinese energy giant M/s Sinopec to join hands with Saudi Arabia’s Aramco in establishing a cutting-edge refinery and petrochemical complex in Pakistan. The government is considering incorporating the $10 billion Saudi Aramco refinery project into the framework of the China-Pakistan Economic Corridor (CPEC).

In a letter addressed to Sinopec’s President Yu Baocai, PSO’s Managing Director/CEO Syed Muhammad Taha expressed PSO’s interest in inviting Sinopec to participate in this significant venture. The project, a collaboration between PSO and Saudi Aramco, aims to build a refinery and petrochemical complex with a processing capacity exceeding 300,000 barrels per day. It is designed to produce various high-value petroleum products, including gasoline, diesel, and jet fuel, alongside petrochemicals.

According to sources, Prime Minister, who also held meeting with Governor Saudi Central Bank- SAMA, Ayman Alsayari, directed Finance Minister, Governor State Bank of Pakistan and Secretary SIFC to explore possibility of securitizing some portion of remittances from Saudi Arabia to Pakistan and leveraging them as collateral or any other creative financial instrument. Prime Minister has given three months’ time for finalization of concrete proposals on this matter.

In the light of discussions with President Islamic Development Bank, Sulaiman Al Jasser, Prime Minister directed Minister for Power, Chairman Wapda and Secretary SIFC to prepare and share pre-feasibility studies of electricity transmission upgradation project and funding requirements of Diamer Bhasha with IsDB.

The Prime Minister has given assignment of preparing “offer for developing Pakistan’s National Transmission Vision and Implementation Plan” to Finance Minister, Minister for Planning, Minister for Petroleum, Secretary SIFC and Pakistan’s ambassador to KSA within 1-2 months.

The Vision will be prepared in the light of discussion between Prime Minister, Shehbaz Sharif and General Secretary of Saudi Pakistan Supreme Coordination Council, Mumammed bin Mazyad Al-Tuwaijri.

The Prime Minister has directed Minister for Power, Managing Director PPIB and Secretary SIFC to arrange visit of ACWA Power delegation to Pakistan for further discussions on the proposed 600 MW solar project.

Pakistan’s power sector team led by Power Minister and Sardar Awais Leghari was in Saudi Arabia to lure Saudi investors to invest in power sector as previously Saudi Minister for Energy, Finance and other high-ups conveyed their concerns to top Pakistani authorities on dismal treatment meted out to M/s Al-Jomaih Group which is one of the key investors in K-Electric.

Prime Minister had directed Power Minister to coordinate with Saudi Energy Minister to make a presentation on Pakistan’s power sector structure and learn from Saudi experience of modernizing its power sector in order to develop options for maximizing induction of renewable/solar power (possibilities of 6,000-10,000 MW) through ACWA’s investments.

The source said Pakistani delegation held detailed meetings with Saudi investors and offered them different power sector projects. Chairman Nepra, Waseem Mukhtar and former Managing Director NTDC, Fayyaz Chaudhry were also part of the delegation as presently NTDC is without a Managing Director after removal of Rana Abdul Jabbar on the basis of a decision of Lahore High Court.

Prime Minister has also directed Minister for Petroleum, Secretary Economic Affairs Division, Secretary SIFC and Secretary Railways to make formal request to Saudi Arabia to allocate funds for road and rail linkage project to connect RekoDiq with Gwadar/Karachi as Saudi Fund for Development (SFD) has directions to allocate funds for this purpose.

He also directed Petroleum Minister and Secretary SIFC to coordinate with Saudi Ministry of Industries and Minerals for Pakistan-specific session/program in next year’s future minerals forum.

Minister for Maritime Affairs, Chairman, Port Qasim Authority and Secretary SIFC have been directed to explore investment by Saudi Arabia Red Sea Gate Company in port development in Pakistan.

Commerce Minister, Jam Kamal, Secretary, SIFC and Pakistan ambassador to KSA have been directed to develop trade related specific targets to be monitored on quarterly, half- yearly and annual basis to enhance bilateral trade between Pakistan and Saudi Arabia.

Copyright Business Recorder, 2024