The Government of Pakistan is exploring the integration of a $10 billion Saudi Aramco refinery project into the China-Pakistan Economic Corridor (CPEC) by Chinese energy firm Sinopec, as per reports published in Profit and Business Recorder.
This decision follows reported discussions between Pakistan and Saudi Arabia to broaden their collaboration in the refining and petrochemicals sector. Pakistan’s Deputy Ambassador in Beijing engaged with the leadership of Sinopec Engineering Group (SEG) in a December 2023, meeting, as per reports by Business Recorder.
Reports suggest that Pakistan State Oil (PSO) has initiated talks with Chinese energy conglomerate Sinopec to explore a partnership with Saudi Arabia’s energy giant Aramco for the establishment of an advanced refinery and petrochemical complex in Pakistan.
This collaboration aligns with Pakistan’s consideration of incorporating the $10 billion Saudi Aramco refinery project into the CPEC framework, with Aramco expressing interest in establishing a crude-to-chemical/plastic complex. The initiative was discussed in a recent meeting of the Special Investment Facilitation Council (SIFC) led by caretaker Prime Minister Anwaar-ul-Haq Kakar.
During discussions between PSO’s Managing Director and CEO, Syed Muhammad Taha, and Sinopec Corp’s President Yu Baocai, PSO expressed interest in having Sinopec join the ambitious greenfield refinery and petrochemical initiative in Pakistan. Taha emphasized the project’s potential for Sinopec to leverage its expertise and resources in a market poised for substantial growth.
The proposed collaboration aims to establish a modern refinery and petrochemical complex capable of processing over 300,000 barrels per day, producing premium petroleum products and petrochemicals. The government has offered incentives to enhance the project’s viability, including a 20-year tax holiday and exemptions on equipment imports.
Taha highlighted Pakistan’s attractive investment landscape, citing its burgeoning population and rapidly growing economy. With energy demand projected to double by 2035, he presented a compelling case for Sinopec’s investment and participation in the strategic market. He invited Sinopec to consider becoming an equity and technical partner in the project, open to discussing various partnership arrangements.
Meanwhile, PSO has approached Sinopec to partner with Saudi Aramco in the refinery and petrochemical complex. The project, incentivized by the government, aims to improve the economy and meet Pakistan’s growing energy demand. The government is also considering drafting a new policy framework to facilitate investment from Aramco, with discussions ongoing between Pakistani and Chinese representatives regarding the $10 billion project.
