Pakistan seeks Saudi energy crisis support

Winter LPG demand triggers import crisis Islamabad requests dedicated Saudi shipments Regional shipping conflict

ISLAMABAD:

Pakistan has sought Saudi Arabia's support for liquefied petroleum gas (LPG) supplies and invited investment in oil storage facilities and refinery upgrades as it grapples with supply disruptions linked to the Iran-US conflict and instability along key regional shipping routes.

Pakistan has relied heavily on LPG imports from Iran through the land border, and the closure of the crossing has raised concerns about supplies ahead of the winter season, when domestic gas demand typically increases.

Islamabad has approached Riyadh for dedicated LPG shipments to help meet the anticipated rise in demand, as disruptions around the Strait of Hormuz and security risks in the Red Sea have added to concerns over regional energy supplies.

The crisis has also highlighted Pakistan's limited strategic petroleum storage capacity. The government is now seeking investment from Middle Eastern countries, including Saudi Arabia and Kuwait, to develop oil storage infrastructure.

The proposals were discussed at a meeting between Federal Minister for Petroleum Ali Pervez Malik and Saudi Arabia's Ambassador to Pakistan Dr Rajeh Tami Albugamy, according to a statement issued by the ministry.

The discussions covered strategic oil storage, refinery upgrades, LPG supplies and commercial cooperation in the mining, petroleum and energy sectors.

Malik told the ambassador that Pakistan had approved a tax-neutral bonded policy modelled on international energy hubs such as Fujairah and Singapore. Under the framework, Saudi companies could establish commercial oil reserves in Pakistan without incurring local tax liabilities.

The minister said the arrangement could help diversify maritime transit risks associated with the Strait of Hormuz and the Bab el-Mandeb Strait while providing access to Asian markets.

He said strategic oil storage facilities in Pakistan would give Saudi Arabia greater flexibility in managing supply routes and reaching regional markets.

Malik also outlined plans to develop a large petroleum storage and refining complex at Hub in Balochistan, with guidance from Technip Energies UK. The proposed facility would be capable of accommodating very large crude carriers (VLCCs) and could strengthen Pakistan's role as a regional energy corridor serving Central Asian and Chinese markets, the statement said.

The minister also highlighted investment opportunities under Pakistan's refinery upgrade programme, which aims to modernise domestic refining infrastructure, improve efficiency and transition to Euro 5 fuel standards.

He thanked Saudi authorities at Yanbu port for prioritising crude oil shipments to Pakistan during recent disruptions in global energy markets. He also discussed with the ambassador coordination with Saudi Aramco to increase crude oil procurement and arrange dedicated LPG shipments.

Pakistan is also seeking Saudi investment in the multibillion-dollar Reko Diq copper and gold mining project in Balochistan. Saudi Arabia has previously expressed interest in acquiring a 15% stake in the project.

Malik said Pakistan valued its longstanding strategic relationship with Saudi Arabia and had conveyed its solidarity with the Saudi leadership and people during a recent visit to Riyadh.

Both sides said their defence and strategic partnership provided a foundation for broader economic cooperation and regional stability.

The Saudi ambassador reiterated Riyadh's commitment to its relationship with Islamabad and said the two countries stood together in all circumstances, according to the statement.

He also announced that the Saudi embassy in Islamabad had introduced same-day processing of visa applications for Pakistani citizens to facilitate travel and promote business, cultural and people-to-people exchanges.

Malik invited Saudi Vice Minister of Mining Khalid Al-Mudaifer to attend the Pakistan Minerals Investment Forum, scheduled to take place in Islamabad on November 12-13.