The Pakistani government has invited Azerbaijan to join the ambitious 0.3 million barrel per day refinery project in the port of Gwadar (Gulf of Oman, Arabian Sea) and Azerbaijan is considering the feasibility of its participation. An informed source told Turan that SOCAR’s participation or not on behalf of the state in this foreign refinery project will depend on commercial attractiveness, and all necessary aspects are being studied. Azerbaijani Deputy Energy Minister Kamal Abbasov held initial talks on this project in Islamabad the other day. Days ago, Pakistani Oil Minister Musadiq Malik during the signing by four state-owned Pakistani companies “Pakistan State Oil” (PSO), “Oil and Gas Development Company Limited” (OGDCL), “Pakistan Petroleum Limited (PPL) and “Government Holdings Private Limited” (GHPL) of the memorandum of understanding for the establishment of the refinery said that “talks are underway to include China and Azerbaijan in the project, which brings it to a potential multinational co-operation”. The ambitious project is estimated to cost between $10 billion and $16 billion and aims to create a modern facility with advanced refining capabilities. The complex will comprise various components, including an offshore infrastructure, a petrochemical complex, crude oil and petroleum product storage facilities, connected pipelines and other important facilities. Saudi Arabia will be the main investor to the project. At that, shares are being specified. Once established, this refinery will produce 8 million tonnes of diesel and 6 million tonnes of gasoline. “China Road and Bridge Corporation (CRBC) acted as a potential contractor for the refinery along with financing from China. Last week, it signed a memorandum of understanding with the Pakistani government to build a large Saudi-backed refinery based on the CPC-F model,” Pakistani media reported. Meanwhile, CRBC has also shown interest in taking an equity stake in the project. The refinery will be built on a 30:70 equity to loan ratio. According to officials in Islamabad, the $7 billion loan amount will be arranged by Saudi Aramco through ?nternational ?inancial ?nstitutions. Besides, CRBC, as the project contractor, will also raise loans from Chinese banks under the Engineering, Procurement and Construction (EPC-F) model. “It is reported that out of the 30 per cent ($3 billion) capital “Saudi Aramco” has shown willingness to share 50 per cent of the capital ($1.5 billion) and the remaining 50 per cent will be held by Pakistan. Of the remaining 50 per cent, PSO will have a 25-30 per cent stake, while OGDCL, PPL and GHPL will have 5 per cent each. However, “Pak Arab Refinery Company” (Parco), which is a joint venture with UAE, has not signed the MoU as it will sign it with PSO later after approval from the stakeholders. ADNOC – Abu Dhabi’s “UAE National Oil Company” has shown its intention to get a larger equity stake. It remains to be seen whether ADNOC will get its equity stake on its own or through Parco,” Pakistani media speculated. It is to remind that “Saudi Aramco” is the largest player in the Middle East in the refining sector and will lead the project in terms of arranging a 70 per cent share of the credits. Note that “Saudi ARAMCO” has already carried out a pre-feasibility study and marketing evaluation and will now carry out a detailed feasibility study of the project before the mega project is launched. A preliminary engineering design (FEED) will also be completed. The new green refinery will be allowed to sell its products as per the minimum Euro-5 specification. The refinery will be allowed to export surplus (relative to domestic demand) petroleum products. Pakistan already has 6 refineries with a total capacity of 20 million tonnes per annum, but due to old technology, they are half-loaded. When a new refinery is set up, some of the old refineries will be dismantled
Source: Turan News Agency