The board of Pakistan State Oil (PSO) has approved up to $3 million for a market study to evaluate the feasibility of a $10 billion green refinery or crude-to-petrochemical complex. This study will be crucial in deciding the future of the mega project.
According to a news report, the decision to conduct a joint market study involving PSO, Sinopec, and Saudi Aramco was initially agreed upon. However, both Sinopec and Saudi Aramco have now pushed for PSO to carry out the market study independently before they make any further decisions.
The study will pave the way for determining the potential for either a green refinery or a crude-to-petrochemical complex. It is expected to cost less than $1 million, but additional supplementary studies and feasibility reports may be required, hence the $3 million allocation.
The market study will assess domestic consumption and export potential for petroleum products, which will help Saudi Aramco and Sinopec decide on the viability and scope of the project. The study will also include evaluating the cost and capacity of the proposed project.
The government has already introduced a new green refinery policy, which includes significant incentives such as a 7.5% deemed duty for 25 years and a 20-year tax holiday, initially designed to attract investment from Saudi Aramco.Â
However, Saudi Aramco has shown less interest in refinery investments worldwide, prompting Pakistan to consider involving the Chinese firm Sinopec as an EPC contractor.
As per official sources, PSO will seek an extension from the Special Investment Facilitation Council (SIFC) for the deadline, which is currently set for November 24, 2024. The process of finalizing terms of reference (TORs) and completing the bidding process will take approximately three months, after which the market study will commence.
The Petroleum Division may assist PSO in seeking exemptions from the Public Procurement Regulatory Authority (PPRA) to expedite the international bidding process for selecting the firm to conduct the market study. This move is intended to ensure that Sinopec and Saudi Aramco have ownership of the study’s findings.
