ISLAMABAD, Pakistan: The Senate was apprised on Friday that currently, there was no progress on the proposed Saudi Funded Oil Refinery Project in Balochistan’s Hub area.
The Federal Minister for Energy Muhammad Hammad Azhar told the Senate in writing on Friday while responding to a question by Senator Zeeshan Khanzada, with regard to establishing the proposed Saudi Aramco Refinery, the Company’s Steering Committee’s last meeting was held in July 2020 where the view was expressed that due to the global economic slowdown and poor project economics, the decision to proceed with the project will be a challenge.
The House was told that it is suggested to take the project forward to the next step by reengaging the Saudi government under the new Oil Refinery Policy 2021, incentivizing the project economics for the revival of investors’ depleted interest in the project.
The minister told that the timeline will be determined after re-engagement between the respective governments on the project. He told that the project will take almost five years to commission if resumed immediately.
In addition, the minister clarified to the House that the proposed Oil Refinery has not been shifted to Karachi. He told that two locations Gwadar and Hub were considered in the project’s pre-feasibility study which was conducted by the consultant M/s Advisian.
Hammad Azhar told that Hub was selected based on its economic viability and technical feasibility due to its close proximity to the Karachi Port Trust (KPT) and requiring considerably lesser distance for deep-water SPM as compared to that for Gwadar.
Furthermore, the minister apprised the Senate that Pakistan is currently a net importer of refined oil products, meeting 70% of its gasoline and 50% of its diesel demand through imports.
With a refinery capacity of 300-400 kbpd, the minister said that the oil refinery project will optimize the Country’s oil supply chain and reduce its import bill considerably (roughly by up, to US$ 450 million per annum), and create direct and indirect employment opportunities along-with other considerable benefits.