The mega project to establish Saudi Aramco Refinery in Gwadar with the $10 billion Saudi Investment has been shelved due to the lack of interest of both countries.
The mega project was announced during the visit of Saudi Prince Muhammad Bin Suleman to Pakistan in Feb 2019, and an MoU was also signed at the occasion.
A top official from the Ministry of Energy confirmed that the proposed project is currently stalled. “Currently, there is no progress on the project. Saudi Aramco 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”, said the top official.
On a query regarding the proposal to shift the refinery from Gwadar to Karachi, he said that the proposed Saudi Aramco refinery had not been shifted to Karachi. He further informed that two locations of Gwadar and Hub (Balochistan), were considered in the project’s pre-feasibility study, which was conducted by the consultant M/s Advisian. Hub was selected based on its economic viability and technical feasibility due to its close proximity to KPT and requiring considerably lesser distance for deep-water SPM compared to Gwadar.
Some months ago, Tabish Gohar, Special Assistant to Prime Minister on Petroleum, had said that Saudi Arabia will not install a refinery at Gwadar but has indicated to set up a refinery along with a petrochemical complex elsewhere.
The official further told that there is a suggestion to take the project forward to the next step by reengaging the Government of Saudi Arabia under the new Oil Refinery Policy 2021, incentivizing the project economics for the revival of investors’ depleted interest in the project.
He said that the timeline would be determined after re-engagement between the respective governments on the project. The project will take almost five years to commission if resumed immediately.
