Sinopec Investment
ISLAMABAD: On Sunday, Saudi Arabia has requested Islamabad to engage China’s Sinopec in the $10 billion green refinery project to be established in Pakistan.
Sources mentioned that while Pakistan has introduced a new green refinery policy with incentives, the required pace of progress needs a boost. Riyadh has expressed a desire for the engineering, procurement, and construction (EPC) contract to be awarded to Sinopec.
Pakistan State Oil, nominated by the Pakistani government, is in contact with the Bank of China and Sinopec as per the request. Sinopec already provides services to Saudi Arabia and has earned a good reputation among clients and the Saudi people.
The Special Investment Facilitation Council (SIFC) has directed the Petroleum Division to assess Sinopec’s interest in the green refinery project alongside Saudi Aramco. If the Chinese firm expresses interest, the council has tasked the division to expedite the necessary approvals.
The Petroleum Division has also been instructed to identify other credible parties interested in investing in the refinery and update on this important issue in the next SIFC Apex Committee meeting.
The mega refinery, located in Hub, Balochistan, will annually produce 8 million tonnes of diesel and 6 million tonnes of gasoline meeting 5-euro specifications.
In July of this year, the China Road and Bridge Corporation (CRBC) signed an MoU with the government to construct the refinery based on the Engineering, Procurement, and Construction (EPC-F) model. However, the government is now working to include Sinopec in the project at the request of Saudi Arabia.
The refinery’s construction is based on a 30:70 equity-loan ratio, with Saudi Aramco and Pakistan sharing the equity. Saudi Aramco has conducted pre-feasibility studies and market assessments and will proceed with a detailed feasibility study. The Front End Engineering Design (FEED) will also be completed during the process.
The new green refinery will have the flexibility to sell its products, meeting specified standards, to any marketing company, including their own affiliates in the marketing and distribution sector in the country.
Additionally, it will be permitted to export surplus petroleum products, subject to regulatory approval, and products with specifications that lack domestic demand under notification to the relevant authorities. Overall, Saudi Arabia urges Islamabad to seek Sinopec investment in the $10 billion green refinery project in Pakistan.
