Saudis link investment with China tie-up

Expresses willingness to invest in Karachi's chemical industry project

ISLAMABAD: Refusing to enter into a partnership with any private Chinese companies in Pakistan's oil and gas sector, Saudi Arabia has said it would make investment in an oil refinery project in Gwadar only in partnership with a Chinese government company.

Saudi Arabia has also rejected Pakistan's offer to invest in the transmission lines of the country's power sector.  However, the Saudi delegation that is visiting Pakistan has expressed willingness to invest in Karachi's chemical industry project.

In connection with this chemical industry project, a high level Saudi delegation will visit Pakistan to examine Islamabad's offer and also visit the site that is located on 100 acres of land.

So far the issue of investment in any dam including the Diamer-Bhasha dam has not come under discussion with the Saudi team. Pakistan government has already set up a fund for the dam.

It has also been made clear to the Pakistani officials that the Kingdom would not enter into any competitive bidding for investment in Pakistan. It will invest in projects that are free from bidding process while the responsibility for provision of security will rest with Pakistan.

An important personality engaged in talks with the Saudi delegation said the team consists of low level officials and is headed by an adviser to the Saudi trade minister. It also includes representatives of companies, including Saudi Aramco and ACWA Power.

Sources said the US is a majority shareholder in Aramco and the delegation that has come to Pakistan does not have the authority to sign a memorandum of understanding (MoU) with Islamabad.

This delegation will agree to the MoU between the two states for bilateral trade and expansion in investment projects and will take permission for the MoU from relevant forums in both the countries.

Law Division from Pakistan will ratify the draft MoU after which the cabinet will give its nod. Similarly, the Saudi delegation will present this MoU to the concerned forum. In case of a deal, a high-level delegation will come to Pakistan or a Pakistani delegation will visit Riyadh where the MoU will be signed.

According to sources, the Saudi delegation has inquired about the average percentage of profit for Gwadar investment. The delegation has also discussed prospects of balancing the two-way trade. The Pakistani officials have been asked to increase imports from SA so that the imbalance in trade can be tackled.

The Saudi officials have said that their decision to invest in setting up an oil refinery in Gwadar will be subject to provision of infrastructure. The representatives of the Saudi Aramco have apprised the Pakistani officials that Pakistan will have to provide electricity, water, gas, roads and basic infrastructure.

The responsibility of security will also be on Pakistan.

Source said Saudi Aramco has refused to enter into partnership with private Chinese firms for building an oil refinery in Gwadar and said they will only enter into an agreement for investment and partnership with a Chinese government company. Riyadh will also not enter into any bidding for investment in Pakistan.

The Saudi delegation has given the nod to investment in project that will convert seawater into potable water. Representatives of ACWA Power has had detailed discussion with the Pakistani officials.

According to their schedule, the Saudi delegation was supposed to stay in Pakistan till Friday but since talks have already completed, the delegation may return home by Thursday.