The country’s first trillion-rupee-company Pakistan State Oil (PSO) and the government of Khyber-Pakhtunkhwa (K-P) signed a deal to build a $600 million oil refinery, with a refining capacity of 40,000 barrels of oil per day.
The multimillion dollar project is expected to be fully commissioned by 2016-17.
The refinery will be established as a public-private partnership, of which PSO will hold a stake of 45% and K-P to own 25%. The remaining 30% stake will be divided into private equity which can own a maximum 20% stake and the rest (10%) will be floated on the stock market after completion of the project.
The cost of the project had been estimated at $600 million however, final cost will be determined after completion of the feasibility study. They said that physical work on the project was expected to start by the end of the calendar year. An official of the petroleum ministry said that the proposed refinery will be a state-of-the-art project, capable of producing Euro-4 compliant products.
According to the agreement, the refinery will span over 400 acres of land in Kohat, K-P.
According to a press statement on Thursday, the refinery will help improve the overall availability of petroleum products across the country as well as result in a sizeable foreign exchange savings for the nation. It shall also increase PSO’s operational base through diversification in the midstream segment and lower distribution cost in the related supply envelopes.
In addition to these benefits, the refinery will also help create job opportunities for the local populace as well as professionals from various technical backgrounds. It is also expected that substantial foreign direct investment will also take place as a result of this project.
Both parties were of the opinion that the proposed project will serve as the foundation for future joint initiatives and suggested to continue efforts to do more for the future progress and prosperity of Pakistan.
Speaking after the event, PSO MD Naeem Y Mir said, “By establishing the refinery, PSO has taken yet another step on the road to developing a self-reliant energy supply chain for the country. The company is already working on a number of other projects, which coupled with this refinery will help meet Pakistan’s energy needs in the years to come.”
Published in The Express Tribune, April 12th, 2013.
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