Islamabad July 27 2023: Oil and Gas Development Company Limited (OGDC) and Pakistan State Oil Company (PSO) have signed Memorandum of Understanding (MoU) for cooperation and collaboration and a joint investment strategy for setting up a Greenfield refiney project in Baluchistan under a consortium with foreign investors.
The project will benefit from the incentives offered by the Government of Pakistan under the Pakistan Oil Refining Policy for New/Greenfield Refineries, 2023 and provide an opportunity to OGDC for vertical integeration in the Oil and Gas sector.
The MoU will show Pakistan’s commitment to the project, which aims to set up a state-of-the-art deep conversion refinery with a capacity of at least 300,000 barrels per day (bpd) at Hub in Balochistan province.
The refinery, which will produce 8 million tonnes of diesel and 6 million tonnes of gasoline with Euro 5 specifications per year, will be established under the newly approved green refinery policy that offers incentives such as a 7.5 percent deemed duty for 25 years and a tax holiday of 20 years.
The project will be financed on a 30:70 equity-loan ratio, with Pakistan and Saudi Aramco each contributing 15 percent of the equity. Saudi Aramco, one of the world’s biggest oil companies, will lead the project in arranging the loans. Saudi Aramco would provide $1.5 billion as equity and the same amount would be arranged from Pakistan, according to the senior energy minister official statement to The News.
