Debt cleared: Abu Dhabi plans to revive Khalifa refinery project

Published: August 16, 2013
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The Khalifa refinery will become the largest oil refinery of the country with a refining capacity of 250,000 barrels per day based in Balochistan and costing an estimated $6 billion. ILLUSTRATION: JAMAL KHURSHID

The Khalifa refinery will become the largest oil refinery of the country with a refining capacity of 250,000 barrels per day based in Balochistan and costing an estimated $6 billion. ILLUSTRATION: JAMAL KHURSHID

ISLAMABAD: 

Barely two months after the new PML-N government has taken over, the Abu Dhabi government is planning to revive the multi-billion-dollar Khalifa Coastal Oil Refinery – a joint venture with Pakistan – which was put on the back burner during the previous government’s tenure because of global recession and a row over management issues.

The board of directors of Pak Arab Refinery Limited (Parco) has decided to immediately call a special meeting on the refinery in an attempt to finalise arrangements to kick off work on the project.

The Khalifa refinery will become the largest oil refinery of the country with a refining capacity of 250,000 barrels per day based in Balochistan and costing an estimated $6 billion.

At present, Parco is the largest refinery of the country with a capacity of 100,000 barrels per day.

Parco is a joint venture between the Government of Pakistan and the emirate of Abu Dhabi in which the former holds a 60% share and the latter has a 40% stake through the Abu Dhabi Petroleum Investment Company LLC, a subsidiary of International Petroleum Investment Company (IPIC).

In the Khalifa refinery, IPIC will have majority shareholding at 74% whereas Parco will have 26% stake.

According to sources, mounting inter-corporate debt was one of the key reasons that forced the Abu Dhabi government to put the project on hold. As the new government has cleared almost all of the debt, Abu Dhabi is planning to press on with the project.

Officials said the Parco board, in its last sitting in June, decided to hold a meeting on reviving the Khalifa refinery, but it could not be held because of some reasons. Now, it has been decided to hold a special meeting on the project very soon to finalise arrangements for moving ahead with construction work on the refinery.

“A special meeting of the Parco board of directors will be held to resolve the issues that are blocking the way of the project,” an official said.

The Parco board has already accorded approval to initial funding of $500 million for the refinery, including immediate release of $13 million for sub-contracts.

The Khalifa refinery, which has been allotted 1,000 acres of land, will have a capacity to refine 13 million tons of petroleum products per year.

Published in The Express Tribune, August 16th, 2013.

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Reader Comments (9)

  • SHB
    Aug 16, 2013 - 2:56AM

    Good news for the economy and people of Pakistan.

    Recommend

  • M Qureshi
    Aug 16, 2013 - 7:20AM

    Rather than simply reporting on such events, the Express Tribune should analyse such developments —- what it means to the country, where will the product be sold, is there a sufficient demand for it, how will it affect the other refineries, time period for project implementation.Recommend

  • Saif Shamsi
    Aug 16, 2013 - 9:50AM

    Parco is no more the largest refinery in Pakistan as Byco’s new refinery has a capacity of 120k bpd compared to Parco’s 100k bpd.

    http://tribune.com.pk/story/543736/byco-considers-listing-countrys-largest-refinery

    Recommend

  • Aug 16, 2013 - 11:03AM

    Pakistanis have to now start changing their mental and moral approach to life. We hve to start looking ahead and rely more on our own education, intelligence, hard work, and experience.
    This is an inviolably good project for the country but how much will it reduce the cost of doing petro-dollar business for the common person? Salams

    Recommend

  • U-Turn
    Aug 16, 2013 - 3:50PM

    Expect nothing from the so-called Friends of Pakistan. They know the ground realities of Pakistan and will never invest a single penny over here. Mark my words!

    Recommend

  • A. Khan
    Aug 16, 2013 - 6:23PM

    Potential $6 billion investment in Balochistan and the BLA is complaining that the province is being ignored ? Perhaps they should be fighting to ensure that investors get a safe environment for their investments. This tells me that BLA is fighting a turf war to protect the sardars and not to improve the lot of Baloch.

    Recommend

  • shahid
    Aug 16, 2013 - 8:30PM

    @U-Turn:
    Stop poisinous propaganda. UAE government has lot of investments in Pakistan.and they are shrewed business people.The ground reality is that it will help them with cheap labour and will be a profitable project for both countries.

    Recommend

  • Timour
    Aug 16, 2013 - 9:53PM

    Propaganda aside definitely this will be a great project for all parties involved. Realistically however a refinery of this nature will probably not be Chinese and will require a number of ‘Goras’ to come for implementation and given the security situation in the country and in particular the situation in Balochistan, I would be very surprised if there was to execute appetite on this project either by the sponsors or by the project implementation bodies. No one (apart from the Chinese and that too for strategic reasons) will invest money in countries where there is a risk of things being blown up, people being killed and where a single gun man can hold the red-zone of the capital city hostage for six plus hours.

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  • Kalu Mama
    Aug 16, 2013 - 10:11PM

    Parco is turning into an energy giant. Purchase of Chevron and now Khalifa refinery. Talk about aggressive expansion.

    Recommend

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