By Staff Reporter
ISLAMABAD: The government on Friday announced plans to build a new refinery to meet the country’s energy needs.
Minister of State for Petroleum, Musadik Malik, said the project, costing between $10-14 billion, has been approved by Prime Minister Shehbaz Sharif during a Cabinet Committee on Energy (CCoE) meeting.
The new refinery, with a capacity to refine 350,000 barrels of crude oil per day, will be entirely supplied by Aramco, providing investment opportunities from countries such as China.
Saudi Aramco has agreed to invest in the project after the Pakistani government included incentives requested by the Saudi oil giant in the draft of the refining policy.
The proposed refinery will be built on a 70:30 loan equity ratio, with Saudi Aramco sharing 30 percent equity with Pakistan State Oil (PSO) on a 50 percent basis.
A Chinese company will also be involved in the project, which will be completed under the engineering, procurement, and construction (EPC) mode.
Minister Malik told a news conference that the new refinery is expected to bring significant economic benefits to Pakistan, with a projected net foreign exchange of $9 billion over 25 years.
“The project will create numerous job opportunities for Pakistanis, while protecting the country from any future disruptions to the supply chain of petroleum products.”
The minister said the government has also implemented a new policy to provide less expensive energy by using liquefied natural gas (LNG), liquefied petroleum gas (LPG), and solar energy.
The policy aims to promote energy conservation for sustainable development and to end the monopoly of a few companies that have been charging consumers exorbitant prices. This will encourage competition among energy companies and result in competitive prices for consumers, including tenants who have been overcharged for privately supplied energy resources by landlords and building owners.
Malik further said the government has decided to stop supplying gas to power plants and instead provide 50 million cubic feet per day (MMCFD) of gas to low-income households.
“We will take back cheap gas from the wealthy and provide it to the impoverished,” he stated. “These new initiatives demonstrate the government’s commitment to meeting the country’s energy needs while prioritizing affordability and fairness for all.”
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