State Minister of Petroleum of Pakistan Mousadik Malik said that four Pakistani public entities signed three memorandums of understanding to raise necessary local equity for a Saudi oil refinery project worth billions of dollars, and signed engineering, procurement and construction contracts with a Chinese company.

This $12 billion Saudi project is capable of handling 350000 to 450000 barrels of crude oil per day, initially agreed upon during the visit of Saudi Crown Prince Mohammad bin Salman to Islamabad in 2019.

Pakistan National Petroleum, Oil and Gas Development Corporation, Pakistan Petroleum Company Limited and Government Holding Private Limited signed three memorandums of understanding to raise the required local equity, while the EPC agreement was signed with China National Offshore Oil Corporation Corporation and Pakistan Sovereign International Corporation.

In our earlier discussion with the Saudi authorities, there were two questions. One was obviously who was the other equity partner, so Pakistan firmly believed that if Pakistan thought this was a feasible project, then Pakistan should invest its own equity in the project, Malik said during the signing ceremony of the memorandum of understanding. Therefore, as of now, we have established over 40% to 45% equity partnerships.

Malik said that Pakistan, Saudi Arabia and Saudi Aramco are honorary partners and have held several rounds of talks to reach agreement on the way forward. As I said, we are in the final stage, which means that we are basically at the spreadsheet level, trying to eliminate all existing or possible wrinkles, so that we can build a world-class refinery of about 300000 barrels in Pakistan, he added.

PSO is in a leading position in local equity, accounting for 25%, and other companies have also committed 5% to 10% of their shares, which has resulted in our equity share exceeding the requirements. Malik said that the Pakistani government has introduced the best Chinese companies for EPC contracts. We have brought in world-class EPC construction partners for refineries, who will also have a place in the equity.Editor/XingWentao