Pakistan has decided to expand its petroleum storage capacity, while a major investment is expected from Saudi Arabia for the establishment of an oil refinery in Gwadar.
Sources in the Ministry of Petroleum indicate that Saudi Arabia is likely to invest around $10 billion in the Gwadar oil refinery project.
The plan involves Saudi Aramco partnering with Pakistani companies to set up the refinery, with 60 percent investment expected from Saudi Arabia and 40 percent from local firms.
According to sources, the project includes participation from Pakistan State Oil (PSO), Oil and Gas Development Company Limited (OGDCL), Pakistan Petroleum Limited (PPL), and Government Holdings (Private) Limited (GHPL).
The proposed refinery is expected to have a production capacity of up to 400,000 barrels per day. To facilitate the investment, a proposal is under consideration to grant a 20-year tax exemption on imported machinery required for the project, aiming to attract and secure long-term foreign investment in Pakistan’s energy sector.
On Saturday, it was reported that Pakistan is set to receive $5 billion in financial support from Saudi Arabia and Qatar, offering a critical buffer for its fragile external position.
The expected inflows come at a crucial juncture, with Islamabad preparing to repay $3.5bn to the United Arab Emirates this month and facing pressure on its foreign exchange reserves.
Anadolu news agency, citing Pakistani officials, also reported the development, adding that Islamabad has sought additional support, including expansion of existing cash deposits and extension of its oil financing facility, which is due to expire later this month.
This additional support from Saudi Arabia and Qatar will help Pakistan to make all payments by the end of the current fiscal year.