Saudi Arabian Oil Group, Aramco, is reviewing Pakistan’s proposal for constructing a deep conversion refinery in Hub, Balochistan. The $10.5 billion refinery, which would have the capacity to refine between 350,000 and 450,000 barrels per day, is being considered under an engineering, procurement, construction and financing (EPC-F) model by the Gulf nation, according to a high-ranking Energy Ministry official. As part of the proposal, China is expected to assist in mitigating risks for Saudi investment.
Details of the Project and Impact on Pakistan’s Oil Refining Sector
The project could escalate to a cost of $14 billion if a petrochemical complex were added to meet the future demand. The official added, “No new hydro-skimming refinery shall be allowed to be installed in the country, and only brand new deep conversion refinery will be allowed”.
Aramco is a serious player, so various financial institutions would easily come up with loan offers. Currently, five companies operate in Pakistan’s oil refining sector, mostly based on outdated hydroskimming technology. With the creation of this new refinery, it would mark a significant step forward in updating Pakistan’s refining capacity.
