Pakistan seeks to deepen economic ties with Riyadh

ISLAMABAD:

Following the signing of a defence pact between Pakistan and Saudi Arabia, economic cooperation is being expedited as Pakistan is poised to pitch multibillion-dollar projects in the energy sector and is expected to clinch deals under the “Pakistan Bridge between Gulf Countries and China Concept” in the first week of next month.

Sources told The Express Tribune that a high-level Saudi delegation was due to arrive in early October, when the two sides were expected to sign Memoranda of Understanding (MoUs).

The projects include the revival of a $10 billion oil refinery project, forming partnership for setting up an oil terminal, and onshore and offshore drilling in Pakistan.

Saudi crown prince had visited Pakistan in 2019 during the tenure of the Pakistan Tehreek-e-Insaf (PTI) government and offered to invest $20 billion in different sectors, mainly in an oil refinery. The investment for setting up the refinery in Gwadar was projected at $10 billion.

Recently, Pakistan and Saudi Arabia have signed a defence pact, which is paving the way for boosting cooperation in the energy sector as well.

Pakistan will look for Saudi partnership with state-owned Pakistan State Oil, which has planned to set up an oil terminal in Hub, Balochistan, at a cost of $300 million.
Pakistani exploration companies such as Mari Petroleum and Oil and Gas Development Company (OGDC) are going to seek partnerships in the existing oil and gas blocks to boost production.

“Pakistan’s top priority is to convince the Saudi side to resume work on the $10 billion oil refinery planned in Gwadar,” remarked an official.

Sources said that Pakistan was working on a concept to make Gwadar Port a bridge between the Gulf countries and China. China is a big importer of Saudi oil. Similarly, Pakistan also imports a huge quantity of crude from Saudi Arabia.

The establishment of oil refineries would not only provide opportunities for Pakistani labour, but it would also open avenues for oil exports to China, sources said, adding that Pakistan and China had already signed an MoU to build an oil pipeline. Gwadar Port will also reduce the route for oil supply to China.

Pakistan has formed a working group, which is currently finalising the projects that will be pitched during the visit of the Saudi delegation. Moreover, the Central Asian states are looking at Gwadar Port for the import of oil and other goods.

The maritime affairs minister on Friday held a meeting, attended by representatives of other ministries to finalise the upcoming projects.

The minister urged senior officials from key ministries and state institutions to identify projects for rapid funding, propose regulatory reforms, and strengthen trade and transport corridors.
He announced the creation of a joint working group, bringing together maritime, communications, railways and defence ministries, to produce a short list of workable projects in its first meeting next week.

Discussions focused on integrating Karachi Port, Port Qasim and Gwadar Port with regional transport corridors through rail, road and air networks.

The maritime minister underlined the importance of the long-delayed ML-I railway project, expected to boost freight and passenger traffic from Khyber-Pakhtunkhwa to southern ports and said Pakistan must match its development agenda with the connectivity needs of partner countries.

Other ministries outlined their own connectivity priorities. The communications ministry called for laying fibre optic cables along railway lines and expanding submarine cable networks. It also underlined the need for swift completion of the M-6 motorway, which would link Karachi to Sukkur and was described as a missing link on the China-Pakistan Economic Corridor.