ISLAMABAD – A state-of-the-art oil refinery and petrochemical complex,being established at Gwadar deep seaport city, has tremendous potential tocapture markets in China and Central Asian landlocked stateswhere fuel supply takes weeks to reach through other routes.
Under the China Pakistan Economic Corridor (CPEC), the fuel transportationto China via Pakistan would take just seven days as import through westernChina takes almost 40 days, an official source privy to the Petroleumsector developments told APP.
He said the mega oil facility was being constructed with around US $11billion Saudiinvestmentat the Gwadar deep seaport, an ultimate destination of the CPEC, would alsohelp refine and store imported oil for onward transportation to China anddevelop fuel supply chain for the landlockedCentral Asian states.
Besides, the official said the facility, having capacity to refine 200,000to 300,000 barrelsper day (bpd) oil, would help bring down the country’s oil import bill byUS $ 1.2 billion annually.
Pakistan’s average annual oil consumption is around 26 million tons (MT),out ofwhich 13.5 MT was met through local production of eight existing oilrefineries. “While, 50 percent crude oil is imported to meet the energy needs.”
Answering a question, he said soon after singing the Memorandum ofUnderstanding(MoU) for the refinery and petrochemical complex, Pakistan and Saudi Arabiaagreed to establisha Joint Working Group (JWG) to ensure timely and smooth execution of themulti billion dollarsproject.
The official said the JWG would hold regular interaction to exchangeinformation neededfor carrying out feasibility studies of the project on a fast track.
Saudi Arabia, he said, was keen to set up the facilities at the earliest,which was reflected by four visits of Saudi technical teams and EnergyMinister to Pakistan to inspect the project site and discuss othermodalities, prior to signing of the MoU.
Replying to another question, the official said the government was makingall-out efforts to upgrade existing oil refineries and establish new deepconversion facilities to achieveself-sufficiency in this sector.
For the purpose, he said, the government had recently banned import offurnace oil and announced unprecedented incentives package for setting upnew deep conversion oil facilities,advising the existing oil refineries to enter into commercial agreementswith power producers for utilization of their capacity for furnace oilstorage and modernization of their facilities.
The official said an unprecedented incentives package was in place forsetting up new deep conservation oil refineries, under which interestedparties were exempted from all duties,taxes, surcharges and levies on import besides a 20-year income tax holiday.
“The exemption will be applicable on all machinery, vehicles, plants andequipment, other materials and consumables for setting up, operation,maintenance and repair of arefinery,” he said.
The package, the official said, would also be applicable on existingfacilities where refining capacity was expanded by installing deepconversion units with capacity of at least100,000 barrels per day (bpd) oil.