ISLAMABAD: The Sinopec, a Chinese firm whose top executives faced corruption charges in the near past, may get multi-billion-dollar LNG supply and oil import contracts on government-to-government deal after cabinet approval.
The cabinet, chaired by Prime Minister Shahid Khaqan Abbasi, in its first meeting approved initiating negotiations with China National Development and Reform Commission for the supply of POL products and LNG.
According to media reports, the Sinopec President faced corruption probe in 2015 in a crackdown by Chinese authorities. But the Chinese government nominated this energy firm to sign the deal with Pakistan.
Officials said that Sinopec is China’s largest energy firm which traded 400 million metric tons of petroleum products every year. They said that Sinopec was a trading firm, but Pakistan could get some discounts on the import of petroleum products to meet domestic energy needs.
Talking to The Express Tribune, Petroleum Division Secretary Sikandar Sultan Raja said the cabinet had just approved starting negotiations with China for the import of LNG and petroleum products. “If any Chinese company is facing a corruption probe, the government will look into it,” he said.
Currently, Pakistan depends on Gulf countries such as Saudi Arabia, the UAE and Kuwait for importing petroleum products to meet domestic needs. Pakistan had a government-to-government deal with Kuwait for importing oil products and this model could be used in signing the deal with China. China is also planning to set up a refinery in Balochistan.
Pakistan offered China to invest in setting up a deep-conversion refinery near Lahore with a production capacity of 250,000 barrels per day (bpd). The offer was made during the visit of a Chinese delegation, headed by Nur Bekri, the Administrator of National Energy Administration, in July this year.
There are currently five hydro-skimming refineries working across the country and their annual output is just 13 million tons of petroleum products. The remaining demand is met through imports.
The growth of domestic petrol demand is growing at an annual pace of 20 per cent and diesel at 10 per cent. The government also invited investors to invest in building white oil pipelines between Multan and Peshawar, besides developing petroleum storage facilities all over the country.
Natural gas constitutes 50 per cent of the primary energy supply while oil has a 32 per cent share.