Pakistan renews proposal for Saudi investment to set up $10 billion refinery at Gwadar as port activity surges 30% 

Pakistan has renewed its proposal for Saudi Arabia to develop a $10 billion oil refinery at Gwadar as increased port activity and regional trade disruptions strengthen the government’s case for investment in energy and logistics infrastructure, The Express Tribune reported. 

Activity at Gwadar Port has increased by up to 30% in recent months as more vessels use Pakistani ports for transhipment amid the US-Israel-Iran conflict.

The government expects port operations to expand further in the coming months and is seeking Saudi investment in a refinery, strategic petroleum reserves and other energy projects at Gwadar.

Back in 2019, Saudi Crown Prince Mohammed bin Salman announced potential investments of $20 billion during his visit to Islamabad, including $10 billion for an oil refinery. However, the refinery investment did not materialise.

Pakistan has since approved an oil refinery policy intended to facilitate new investment, while the SIFC is working to remove bureaucratic barriers.

The Ministry of Maritime Affairs recently presented several proposals to the Saudi-Pakistan Joint Business Council Chairman, Mansour bin Mohammed Al Saud, and other participants during an online meeting.

The proposals included the development of the refinery at Gwadar and investment in liquefied petroleum gas and liquefied natural gas terminals at Karachi Port.

The maritime minister has also had 100 acres of land vacated at Karachi Port for proposed industrial projects.

Saudi Arabia has shown interest in establishing a petrochemical complex at the site, according to officials.

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A Saudi delegation led by the business council chairman held further discussions with Pakistani officials on Thursday. The Special Investment Facilitation Council is leading efforts to secure Saudi investment and address administrative obstacles affecting proposed projects.

Sources said Saudi investors had identified policy inconsistency and bureaucratic delays as two major obstacles to investment in Pakistan. Officials expect further bilateral discussions to focus on resolving these concerns and advancing proposed projects.

Separately, the government has planned an Energy City at Gwadar Port, where oil-producing countries are being invited to establish strategic petroleum reserves.

Officials said participating countries could store oil in Pakistan and export it to other markets, while the Pakistan government would retain the first right to use the reserves.

Petroleum Minister Ali Pervaiz Malik has held meetings with ambassadors of several countries to seek investment in strategic oil storage facilities. He said investors developing oil storage facilities would also be offered tax holidays.

Pakistan currently has no strategic petroleum reserves and relies on commercial stocks maintained by oil marketing companies and refineries.