Saudi Arabia agrees to invest in new oil refinery in Pakistan's Gwadar

[PaklovesTurkiye]

By Reuters
Published: October 4, 2018

Minister says PSO will partner with Saudi oil giant Aramco on project. PHOTO: AFP

ISLAMABAD:

Saudi Arabia has agreed in principle to invest in a new oil refinery in Pakistan’s deep-water port of Gwadar, the petroleum minister said on Thursday.
The state-owned Pakistan State Oil (PSO) will partner with Saudi state oil giant Aramco on the project, Petroleum Minister Ghulam Sarwar Khan told reporters.


Saudi delegation to size up investment opportunities in Gwadar, Punjab


“They showed an interest to immediately invest in the refinery,” Khan said, describing a visiting Saudi delegation.


“We sat down and held initial discussions with them and it was principally decided by both sides that it will be a government-to-government agreement.” Details of the refinery’s costs and scope are to be worked out later, he added.

https://tribune.com.pk/story/1818317/2-saudi-arabia-agrees-invest-new-oil-refinery-pakistans-gwadar/
So, finally...

Another Confirmation

PM-led cabinet approves construction of Gawadar oil refinery, Pak-Saudi pacts

ISLAMABAD: The federal cabinet on Thursday given its consent to business proposals being discussed between Pakistan and Saudi Arabia.

The cabinet headed by Prime Minister Imran Khan discussed a six-point agenda.

"The cabinet gave approval for the agreements discussed between Pakistan and Saudi Arabia during a visit of the Kingdom's delegation last week," Information Minister Fawad Chaudhry briefed media after the meeting.

An approval has been accorded for the construction of an oil refinery in Gwadar, he said.

Also Read: Saudi Arabia agrees to invest in new oil refinery in Pakistan

"Saudi Arabia will make an investment of Rs30 billion in Pakistan pertaining to the discovery of oil and gas,” he said.

Speaking on this occasion, Petroleum Minister Ghulam Sarwar said, "Saudi Arabia is interested in Gwadar and the China-Pakistan Economic Corridor and has expressed the desire to immediately invest in an oil refinery."

"It has been agreed that it will be a government to government (G2G) agreement," Sarwar further added. "Saudi Arabia's minister of energy will visit Islamabad next month," he further said while adding that the volume and other details are yet to be decided.

"At the time of the agreements, provincial governments will also be taken into confidence," the petroleum minister assured.

Speaking about the other points discussed during the meeting, Chaudhry said, "The cabinet approved converting the Prime Minister House into a high-level research university."

The cabinet also accorded approval for appointments of new members in the Ministry of Finance and the fiscal and monetary policy boards, Chaudhry added.

"We have decided to remove the illegal appointments made by former finance minister Ishaq Dar," he added. "The previous government was run by Nawaz Sharif and Ishaq Dar."

Chauhdry further announced that presidents of National Bank, First WomanBank, Zarai Taraqiati Bank and SME Bank have been removed.

Jameel Ahmed and Shams-ul-Hasan have been removed as deputy governors State Bank, the information minister announced. "Ms Vaddiya has also been removed from Competition Commission Of Pakistan," Chaudhry added that two other members of the Competition Commission Of Pakistan had been removed.

https://www.thenews.com.pk/latest/3...ction-of-gawadar-oil-refinery-pak-saudi-pacts

 

[war&peace]

Excellent news...I know certain sectarian-heads will not welcome it for obvious reasons but just ignore these idiots and welcome the investment in Pakistan.

 

[FalconStar]

Very good news, this will bring the much needed FDI and provide loads of jobs to local people.
But I wish they talk about this publicly again when they actually sign a contract.

 

[PaklovesTurkiye]

Excellent news...I know certain sectarian-heads will not welcome it for obvious reasons but just ignore these idiots and welcome the investment in Pakistan.

Yeah. Pakistan needs to go hard on internal and external losers/enemies.

Keep your head down, eyes up and keep working to fix your country

@HRK @Indus Pakistan @Desert Fox @tps77 @Mentee

How do you see this development, gentlemen?

Very good news, this will bring the much needed FDI and provide loads of jobs to local people.
But I wish they talk about this publicly again when they actually sign a contract.

Yeah, that MOU must be converted into ground reality, soon.

Can't afford to waste time and be incompetent.

I think contract will be signed next month when energy minister of Saudia will arrive here

 

[Menace2Society]

Jobs and FDI.

 

[Indus Pakistan]

How do you see this development, gentlemen?

If it does actually reach the fruition stage - I will be most pleased but honestly I have serious doubts. In Pakistan and even governments in west have a habit of chucking out claims like confetti. A few days ago I was in my relatives furniture shop and I noticed his style of dealing with customers. Every time he would throw positive comments about the customer. Later he told me flattery does not cost any money and it makes the customer happy. So it is here. Declaring news grabbbing headlines like "KSA invest $10 billion. Russia invest $10 billion. GCC investor eyeing $10 billion investment. China considering adding another $40 billion to CPEC'. Non of this 'flattery' costs any money but it does buy plenty of good feel publicity.

Who is going to take Fawad to court in 5 years time when non of these have gone anywhere and in fact were forgotten on the deluge of the fresh claims next month.

*Ps. Why would KSA invest in a refinery when that country already has excess refinery capacity? Why would it invest in Pakistan when KSA is the best place for refinery as they require less manpower to operate but large investment and access to easy supply of crude oil?

@niaz

 

[HRK]

Why would KSA invest in a refinery when that country already has excess refinery capacity?

it does not take any share away from Saudi oil business, this purposed oil refinery would only contribute to Pakistan's refine oil consumption and will reduce the import bill of oil, btw this was not the only refinery planned for Pakistan's market if I remember correctly 2 more oil refinery projects was planed by private sector.

 

[VCheng]

If it does actually reach the fruition stage - I will be most pleased but honestly I have serious doubts. In Pakistan and even governments in west have a habit of chucking out claims like confetti.

Not just any confetti, but used confetti, over and over again, the same steaming piles of it. The sad part is that it always works. Remember the 40 billion investment by UAE not that long ago? Now it is the Saudis. Tomorrow it will be someone else.

 

[Indus Pakistan]

it does not take any share away from Saudi oil business, this purposed oil refinery would only contribute to Pakistan's refine oil consumption and will reduce the import bill of oil, btw this was not the only refinery planned for Pakistan's market if I remember correctly 2 more oil refinery projects was planed by private sector.

My understanding is profits on oil refining are very thin. The whole thing works on volume rather then %. Now last time I checked KSA does not have space industry, hi-tech nuclear industry, software powerhouse and neither is it haven for agriculture. But it does have huge amounts of oil. So why would KSA outsource oil refining when that is it's only forte is it has? Why would it not sell refined to oil [value added] instead ship crude oil to Pakistan for onward refining?

That is like Germans shipping crude iron to Pakistan instead of converting it into prized Mercedez Benz, Audi or BMWs? Or the French exporting their grapes instead of converting them to prized Champagne? Does that make sense?

 

[HRK]

So why would KSA outsource oil refining when that is it's only forte is it has?

because Saudis does not export only refine oil but crude oil as well and IF they install a refinery in Pakistan it will in line with their existing business and would not effect their business negatively

plz follow few links:

1- https://www.eia.gov/beta/international/country.php?iso=SAU
2- https://www.eia.gov/beta/internatio...D.M&vo=0&v=H&start=199401&end=201806&showdm=y
3 - https://www.ceicdata.com/en/indicator/saudi-arabia/crude-oil-exports
4 - http://www.worldstopexports.com/worlds-top-oil-exports-country/

 

[ranawat]

Excellent news...I know certain sectarian-heads will not welcome it for obvious reasons but just ignore these idiots and welcome the investment in Pakistan.

Baad marne ke mere uska payam aya to kya ?

 

[Indus Pakistan]

because Saudis does not export only refine oil but crude oil as well and IF they install a refinery in Pakistan it will in line with their existing business and would not effect their business negatively

plz follow few links:

1- https://www.eia.gov/beta/international/country.php?iso=SAU
2- https://www.eia.gov/beta/internatio...D.M&vo=0&v=H&start=199401&end=201806&showdm=y
3 - https://www.ceicdata.com/en/indicator/saudi-arabia/crude-oil-exports
4 - http://www.worldstopexports.com/worlds-top-oil-exports-country/

I will look into that when I have time but I went by what @niaz posted on another thread. He has oil industry background.

 

[Tps43]

Yeah. Pakistan needs to go hard on internal and external losers/enemies.

Keep your head down, eyes up and keep working to fix your country

@HRK @Indus Pakistan @Desert Fox @tps77 @Mentee

How do you see this development, gentlemen?



Yeah, that MOU must be converted into ground reality, soon.

Can't afford to waste time and be incompetent.

I think contract will be signed next month when energy minister of Saudia will arrive here

Bring fdi to pakistan doesn't matter from where it comes

 

[niaz]

because Saudis does not export only refine oil but crude oil as well and IF they install a refinery in Pakistan it will in line with their existing business and would not effect their business negatively

plz follow few links:

1- https://www.eia.gov/beta/international/country.php?iso=SAU
2- https://www.eia.gov/beta/internatio...D.M&vo=0&v=H&start=199401&end=201806&showdm=y
3 - https://www.ceicdata.com/en/indicator/saudi-arabia/crude-oil-exports
4 - http://www.worldstopexports.com/worlds-top-oil-exports-country/

Hon HRK,

Firstly I must state that I respect you far too much to counter your post. This post is meant as a clarification only.

Undoubtedly, Saudi Arabia is about the largest exporter of crude oil in the world. Also, I do not believe that exporting refined products from Gwadar will have a negative impact on Saudi business. My point is that a 950K bpd (about 47.5- million tons per annum) refinery costing in excess of $10-billion is not a viable proposition at Gwadar.

Primarily because with UAE/Parco 250 K bbl refinery at Khalifa point in the operation, Pakistan demand will be largely satisfied, thus Gwadar refinery would become purely an export refinery. Additionally, IMHO China does not need to import refined products from Gwadar because it borders on Kazakhstan, that is why an oil terminal or refinery was not envisaged in the original CPEC model. Saudis always have the alternative of setting up another refinery in their own country, which would save the cost of transportation of crude oil to Gwadar making refined products cheaper to produce.

Finally according to the latest report published in Dawn on 3-10-2018.

"Saudi Arabia not to be made part of CPEC"

https://www.dawn.com/news/1436506/saudi-arabia-not-to-be-made-part-of-cpec

P.S.

I just now read a report also in 'Dawn' that the proposed refinery will only 500 K bbl bpd and cost $8 to $9-billion.
Thus the headline "World's 3rd largest refinery" was way out of line.

 

[HRK]

Firstly I must state that I respect you far too much to counter your post. This post is meant as a clarification only.

Niaz Shaib, I always learn one or two things from senior members like you, you can correct me anytime or on any subject.

Sir can you comment about Khalifa oil refinery project, is it still on the table ....?? because its such an old project and there is no news about it, I was under the impression that UAE has moved that purposed plan to Indian on much bigger scale with partnership of Saudi Aramco.

PTI reported, quoting official sources, that Adnoc will also buy a stake in the planned $44 billion refinery-cum-petrochemical project in the Indian state of Maharashtra. A deal is expected to be signed on Sunday.
https://www.khaleejtimes.com/business/energy/uae-makes-history-in-indian-oil

further links: [1][2]

And as far as this oil city project is concern it is also very old project and we were seeking investment for this project since last decade or so but no concrete success till now, if you remember this very project was first offer to Kuwait than to China and now KSA but in past every time for one reason or other it did not proceed further than the stage of negotiations.