Pakistan, Saudi Arabia to sign 10 MoUs including $10 billion oil refinery deal

Pakistan and Saudi Arabia to sign MoUs including one on a $10 billion Oil refinery during Saudi crown prince’s visit

ISLAMABAD – The visit of Crown Prince Mohammad Bin Salman is a success of economic diplomacy between the two brotherly countries, Pakistan and Saudi Arabia, as “New vistas of cooperation will be unlocked on arrival of Muhammad Bin Salman,” Federal Minister for Petroleum Ghulam Sarwar Khan said on Friday.

The Saudi crown prince will be visiting Pakistan on Feb 16 and 17 at the invitation of Prime Minister Imran Khan. He will be accompanied by a high-powered delegation as well as members of the royal family, key ministers and leading businessmen.

Ten MoUs including one on a $10 billion oil refinery and petrochemical complex are going to be signed with the Saudi Government during the visit of Saudi Crown Prince, Muhammad Bin Salman to Pakistan, the Minister said.

The Saudi side has indicated that the capacity of proposed oil refinery will be between 250,000-300,000 bpd (11-13 million tons per annum) whereas the cost of the refinery will be determined after the feasibility study. Initially both sides will study the feasibility of the proposed project after signing of the MOU. The Federal Minister said that Saudi technical teams have visited Gwadar and Karachi. 

The mega oil refinery will result in added benefits like reliability in fuel supply, import substitution and exports. It will enhance confidence of local and foreign investors. “There will be technology transfer, skill enhancement and Human Capital Development and direct and indirect employment will be generated.” The visiting side has also shown interest in Pakistan’s mines, minerals, fertilizers, phosphate and LNG storage capacity. 

Moreover, the Saudi side has expressed strong interest in exploring investment opportunities in Pakistan’s Petrochemical sector which was termed as a ‘game changer’ and would result in savings of $ 1.2 billion per annum in import substitution. 

He further said that there are eight operating oil refineries in the country. The combined production of local refineries during FY 2018 remained 13.5 million tons/annum versus the consumption of the country as 26 million tons/annum in FY 2018.  The local refineries meet about 50% of the local demand. 

The other MoUs to be signed between Islamabad and Riyadh relate to diverse sectors including mineral development, renewable energy resources, drug control and its smuggling, youth and sports, combating crime and cultural cooperation.