Pakistan seeks trilateral agreement with Sinopec, Aramco for $10bn Green Refinery Project

Pakistan aims to have the state-owned Pakistan State Oil (PSO), Chinese Sinopec, and Saudi Aramco signed a non-binding Memorandum of Understanding (MoU) for the development of a $10 billion green refinery. 

As per a news report, the Special Investment Facilitation Council (SIFC) has directed the Ministry of Foreign Affairs to assist the Petroleum Division in bringing Saudi Aramco and Sinopec on board for this project, a senior SIFC official told The News.

Previously, Sinopec had expressed concerns over the lack of demand for petroleum products in Pakistan and requested that the Petroleum Division, in collaboration with PSO, conduct a market study to evaluate the demand. This study would inform Sinopec’s decision to act as the Engineering, Procurement, and Construction (EPC) contractor and arrange funding.

Initially, there was a proposal for PSO, Sinopec, and Aramco to conduct a joint study to assess the feasibility and benefits of a crude-to-petrochemical refinery for the three stakeholders. 

Under the new plan, Sinopec has asked PSO to independently conduct a market study to determine the demand for the refinery’s petroleum products. Pakistani authorities are in communication with Sinopec’s management regarding this project.

Saudi Arabia also favors awarding the EPC contract to Sinopec. PSO, nominated by the Government of Pakistan, is in contact with the Bank of China and Sinopec. 

The proposed refinery is expected to have a 70% capacity for refining petroleum products and a 30% capacity for producing chemical products.