Sinopec, a Chinese firm, may get a multi-billion-dollar LNG supply and oil import contracts on government-to-government deal after the federal cabinet’s approval.
According to media reports, Sinopec’s President faces corruption charges as part of a crackdown by the Chinese authorities.
Irrespective of its troubles in the Chinese mainland, it was still nominated by the Chinese government to sign the deal with Pakistan.
Cabinet approves initial negotiations
In its first meeting, the Cabinet, chaired by Prime Minister Shahid Khaqan Abbasi, approved the initial negotiations presented by the China National Development and Reform Commission for the supply of POL products and LNG.
Petroleum Division Secretary Sikandar Sultan Raja said
“If any Chinese company is facing a corruption probe, the government will look into it.”
What the deal has to offer to Pakistan
According to informed officials, Sinopec is China’s largest energy firm. They said that even though Sinopec is a trading company, it could help Pakistan get discounts on the import of petroleum to fulfill their domestic energy needs.
Currently, Pakistan meets its domestic energy needs by importing petroleum from the Gulf Countries.
Pakistan may enter into a government to government deal for importing oil products with China as it is in with Kuwait.
China is also planning to set up a refinery in Balochistan.
The rising demand for Energy resources
The demand for domestic petrol is rising at an average rate of 20 per cent and diesel at 10 per cent annually.
Natural gas constitutes 50 per cent of the primary energy supply while oil constitutes 32 per cent.
There are currently five hydro-skimming refineries across the country. These provide 13 million tonnes of petroleum annually. The rest of the demand is met through imports.
The government has invited investors to invest in building white oil pipelines between Multan and Peshawar. They have also developed petroleum storage facilities all over the country.