Saudi refinery to reduce oil import bill by $1.2b: petroleum minister

Ghulam Sarwar says due to improved security situation many countries are keen to invest

Zafar Bhutta February 16, 2019
The Petroleum Division would sign two agreements related to oil and minerals. Khyber-Pakhtunkhwa (K-P) and Balochistan have agreed to sign an MoU for Saudi investment in the mineral sector, the minister said. PHOTO: FILE

ISLAMABAD: Saudi Arabia has no concerns about the security situation in Balochistan where it plans to invest billions of dollars in refinery, minerals and renewable sectors, said Petroleum Minister Ghulam Sarwar Khan.

"The security situation in Pakistan has improved a lot and therefore different countries are interested to make multibillion dollars investment. Saudi Arabia is going to invest over $10 billion in setting up an oil refinery and petrochemical complex [in Balochistan]. The annual oil import bill will be reduced by $1.2 billion due to the new Saudi refinery," said Khan while talking to journalists on Friday.

The minister ruled out concerns of Iran regarding Saudi investment in Gwadar. He said Pakistan has undertaken different initiatives to bring peace and security in the region and is ready to play role of mediator between Iran and Saudi Arabia.

The minister said Pakistan has played a key role in negotiations between the US and the Afghan Taliban and the next round of talks would be held in Islamabad on February 18 soon after the crown prince's visit.

"This is the first step towards bringing peace in the region. As the next step, Pakistan wants to play role of a mediator between Iran and Saudi Arabia. We would like to play the role of mediator between Qatar and Saudi Arabia," he added.

He said ten agreements would be signed during visit of Crown Prince Mohammed bin Salman. Petroleum Division would sign two agreements related to oil and minerals. Khyber-Pakhtunkhwa (K-P) and Balochistan have agreed to sign a MoU for Saudi investment in mineral sector, he added.

Khan said the Petroleum Division wants to raise its security force to protect installations of gas companies in a bid to reduce dependence on law enforcement agencies. He said the government had raised prices of gas because of pressure of the International Monetary Fund (IMF). He announced to revise the existing slabs to address issue of inflated gas bills for domestic consumers that led to countrywide protests against the government.

The Pakistan Tehreek-e-Insaf (PTI) government has introduced some new gas slabs for domestic gas consumers which resulted in inflated bills. He said the IMF pressured the government to increase prices of gas in January but the government increased it later. He said an inquiry into inflated gas bills is under way and the government has decided to review gas prices slabs to cut prices for gas consumers.

Islamabad, Riyadh likely to seal $10b refinery deal

To question regarding demand of re-negotiating the LNG prices with Qatar, he said the government wants to move ahead to improve bilateral relations with Qatar. "NAB [National Accountability Bureau] is investigating the issue, through" he said.

He said Qatar has agreed to increase volume of the LNG import. He said negotiations with Qatar are under way to extend the LNG credit facility. I would visit Qatar by end of this month, he said. Khan said Qatar had been under influence of India in the past and Pakistani manpower could not get employment visa to Qatar. Now, he said, Qatar has agreed to import Pakistani skilled manpower.

Upgrade of refineries unlikely in short run

"Saudi Arabia had also expressed interest to invest in the LNG sector in Pakistan. Riyadh also wants to invest in energy storages," he added.

To a question, he said the government is conducting a study about requirement of gas for different sectors in Pakistan. After assessing gas requirement, the government would sign an LNG deal on government to government.  "The private sector also wants to set up terminals and import the LNG and government would facilitate it in this regard," he said.

The minister shared that Air France was planning to resume its service after 11 years, just like British Airways. 

Published in The Express Tribune, February 16th, 2019.

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