GeraltofRivia
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This is a fantastic news. There have been many rumors about massive investment from KSA and UAE since the inception of CPEC but it is great to see large investment from these two nations, which is a vote for confidence in Pakistan’s future economy.
I think KSA and UAE have been watching closely over the last few years on CPEC on the depth and scale of commitment from China in Pakistan. While they are loaded with capital and have the genuine desire to help, they are quite conscious that they are not capable (both financially and technically) of uplifting a country Pakistan by themselves. They just simply cannot become the lead investor in such a country level venture but they can be a smaller investor (relatively) and are keen to get involved. The firm and massive commitment from China and the progress so far have convinced them that the commitment in CPEC is real and long term and has tied Pakistan and China together into a common development path. They are kind of just “waiting” to be called IMO. The size of investment is a good reflection as you don’t just find $15b out of blue. Pakistan new leadership has done a great job to seize the sentiment and opportunity.
Equally China is more than happy to see KSA and UAE investment as there are more strength with more partners.
With regards to the refinery, this is the area where KSA and UAE have the most expertise and the refineries will be built to supply the incoming manufacturing industry around and a booming economy in Pakistan. Judging by the $5-7b investment and a average construction cost of modern refineries at about $2500 bbl/d, th new refinery will probably have a full capacity of 200,000-250,000 bbl/d if not more, which is a large refinery in the world standard. The refineries that are uneconomical are the old and have 100k bbl/d less capacity. The new refinery will enjoy the proximity with oil field and demand center and higher margin with the latest extraction technology.
I think KSA and UAE have been watching closely over the last few years on CPEC on the depth and scale of commitment from China in Pakistan. While they are loaded with capital and have the genuine desire to help, they are quite conscious that they are not capable (both financially and technically) of uplifting a country Pakistan by themselves. They just simply cannot become the lead investor in such a country level venture but they can be a smaller investor (relatively) and are keen to get involved. The firm and massive commitment from China and the progress so far have convinced them that the commitment in CPEC is real and long term and has tied Pakistan and China together into a common development path. They are kind of just “waiting” to be called IMO. The size of investment is a good reflection as you don’t just find $15b out of blue. Pakistan new leadership has done a great job to seize the sentiment and opportunity.
Equally China is more than happy to see KSA and UAE investment as there are more strength with more partners.
With regards to the refinery, this is the area where KSA and UAE have the most expertise and the refineries will be built to supply the incoming manufacturing industry around and a booming economy in Pakistan. Judging by the $5-7b investment and a average construction cost of modern refineries at about $2500 bbl/d, th new refinery will probably have a full capacity of 200,000-250,000 bbl/d if not more, which is a large refinery in the world standard. The refineries that are uneconomical are the old and have 100k bbl/d less capacity. The new refinery will enjoy the proximity with oil field and demand center and higher margin with the latest extraction technology.
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