Saudi agrees to invest in new Pak oil refinery

Saudi Arabia has agreed in principle to invest in a new oil refinery in Pakistan’s Chinese-funded deep-water port of Gwadar, the South Asian nation’s petroleum minister said yesterday. State-owned Pakistan State Oil will partner with Saudi state oil giant Aramco on the project, Petroleum Minister Ghulam Sarwar Khan told reporters. Details of the refinery’s costs and capacity are to be worked out later, once a formal memorandum of understanding that was approved by Pakistan’s cabinet on Thursday is finalised, he added.

Gwadar, in the southwestern province of Baluchistan, is the crown jewel of China’s more than $60 billion in Belt and Road Initiative (BRI) projects in Pakistan. Last month, Pakistan invited Saudi Arabia to invest in projects related to BRI’s China Pakistan Economic Corridor (CPEC), though the government clarified this week that China was still the only true partner. Petroleum Minister Khan said a visiting Saudi delegation visited Gwadar on Tuesday.

“They showed an interest to immediately invest in the refinery,” Khan said. “We sat down and held initial discussions with them and it was principally decided by both sides that it will be a government-to-government agreement.” The offer came after new Prime Minister Imran Khan made Riyadh his first foreign visit since taking office.