Pakistan seeks partnership with Sinopec in Aramco’s $10bn refinery project

Pakistan State Oil (PSO) has initiated discussions with Chinese energy conglomerate Sinopec to explore a partnership with Saudi Arabia's energy giant Aramco for the development of a cutting-edge refinery and petrochemical complex in Pakistan.

Pakistan is also considering incorporating the $10 billion Saudi Aramco refinery project into the China-Pakistan Economic Corridor (CPEC) framework.

Aramco has expressed interest in establishing a crude to-chemical/plastic complex.

This initiative was discussed in a recent meeting of the Special Investment Facilitation Council, led by caretaker Prime Minister Anwaar-ul-Haq Kakar.

Business Recorder reported that during his recent communication with Sinopec Corp's President Yu Baocai, PSO's Managing Director and CEO, Syed Muhammad Taha, expressed PSO's interest in having Sinopec join the ambitious greenfield refinery and petrochemical initiative in Pakistan.

Taha highlighted the project as a golden opportunity for Sinopec to apply its vast expertise and resources in a market poised for substantial growth and potential.

The proposed collaboration between PSO and Saudi Aramco aims to establish a modern refinery and petrochemical complex capable of processing over 300,000 barrels per day.  

This venture is expected to produce a variety of premium petroleum products such as gasoline, diesel, and jet fuel, along with petrochemicals.

PSO CEO outlined the incentives provided by the government to enhance the project's financial viability, including a 20-year tax holiday, a 7.5% deemed duty concession for gasoline and diesel production for 25 years, and tax exemptions on the import of equipment and materials for the project.

He underscored Pakistan's attractive investment landscape, noting the country's burgeoning population of over 220 million and its rapidly growing economy.

With energy demand projected to double by 2035, Taha presented a compelling case for Sinopec's investment and participation in this strategic market.

He praised Sinopec's proven expertise in refinery and petrochemical projects, its operational excellence, and its strong financial standing as critical to the project's success.

He invited Sinopec to consider becoming an equity and technical partner in the project, open to discussing various partnership arrangements.