The Chinese petroleum industry has indicated an interest in shifting its excess capacity to Gwadar, bringing in estimated investment of $13 billion, a senior government official told Daily Times on Wednesday.
The China Chamber of Petroleum Industry (CCPI) and All China Federation of Industry and Commerce (ACFIC) conveyed to Pakistani authorities during a recent visit that the Chinese petroleum industry is keen to invest in Pakistan”s energy sector, the official said.
A mega oil city at Gwadar port
Wednesday, October 01, 2008
ISLAMABAD: A mega oil city at Gwadar port, which is the most strategic project with an investment of $40 billion.
The government wants to establish at the Gwadar port the biggest crude and refined oil storage base in the region, for which it had allotted 12,500 acres of land. It had announced that the required land be made available on lease at nominal rates to interested parties for setting up refineries or making investment in oil logistics and storage facilities.
Under the plan, the official said, the project would be executed in two phases. In Phase-1, a petrochemical city will be set up with an initial investment of $12.5 billion. In this city, a big refinery, along with petrochemical, oil logistics and storage complexes will be set up.
In the first three years, the refinery will be able to refine 10.5 million tonnes of oil annually. This capacity will be increased up to 21 million tonnes in seven to nine years.
The official said Chinese Petroleum Chamber would come up with a $12.5 billion investment plan for the project.
On behalf of China, Great United Petroleum Holdings Company Limited (GUPC) is working on the feasibility study of the petrochemical city project.
The official said GUPC would first conduct the feasibility study and preparation work for the project and then both countries would enter into a formal agreement for materialising the petrochemical city project.
The official said GUPC would also build 1,000-2,000 service stations in Pakistan as service terminals for the petrochemical city.
The ACFIC and CCPI indicated that both the public and private sectors should cooperate in energy projects in Pakistan, with the Chinese private sector in particular seeing a lot of opportunities here, the official said.This cooperation will not be restricted to building an oil pipeline to set up an energy corridor to Gwadar, but also in shifting energy related industry to Pakistan.
However, the government will need to provide strong support to lay down a framework for a safe financial, investment and security environment in Balochistan to attract this investment, the official said.
He said the Chinese petroleum industry sees four potentially fruitful projects. Firstly, an oil pipeline linking Gwadar to Xinjiang in China to set up an energy corridor. The economic viability of such a project is yet to be worked out. Secondly, the development of Gwadar Port Energy Zone, where the Chinese could set up an oil refinery with a capacity of 21 million tonnes.
China has been preparing a similar project along the Yangtze River in collaboration with Saudi Arabia for the last two years, but has now indicated it could shift the project to Pakistan, the official said. Other countries besides China will also be invited to invest in the project.
Thirdly, the Gwadar energy zone could accommodate other energy sector industries. The Chinese business groups said that China has excess capacity in the petroleum services industry and planned to move the excess capacity to Dubai, but was now considering shifting it to Gwadar, the official added. According to their initial estimates, the Gwadar Port Energy Zone could attract investment of up to $13 billion.
Fourthly, the Chinese petroleum industry also indicated an interest in oil and gas exploration projects in Pakistan, the official said. The Chinese business groups had proposed that a Pak-China energy and trade cooperation promotion association be established for such projects.
The association would include members from the oil and gas sector and other industries in the power sector. They had also suggested that a Pak-China joint investment company be set up to finance these projects, the official said.
Courtesy by Daily Times
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