China and Pakistan are likely to sign a Memorandum of Understanding (MoU) on the crude-to-petrochemical refinery project during Prime Minister Shehbaz Sharif’s next month visit to Beijing.
According to a national daily, citing a senior official of the Ministry of Energy, the two countries are expected to sign an MoU on the refinery project during the PM’s visit.
The official told the national daily that “Pakistan State Oil, Sinopec, a Chinese company, and Saudi Aramco may agree to carry out the joint study to assess whether the crude-to-petrochemical refinery will be economical and beneficial for the said three stakeholders or not.”
He added that the joint study’s results will pave the way for investment in the proposed project. Following the conclusion of the joint study, the size and capacity of the project will be decided.
According to the senior official, Pakistani authorities are in touch with China’s Sinopec for the refinery project.
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Saudi Aramco is awaiting the results of the joint study before making a final decision on investment. The company is leaning towards investing in a petrochemical refinery rather than a green refinery.
“After that (study) Sinopec and Saudi Aramco will decide if they should be a part of petrochemical refinery or not,” the official said.
The Kingdom of Saudi Arabia is also pushing for the engineering, procurement, and construction (EPC) contract to be granted to Sinopec. In line with this, Pakistan State Oil, nominated by the Pakistani government, is engaging with the Bank of China and Sinopec.
The proposal under consideration involves constructing a crude-petrochemical refinery with 70% capacity to refine petroleum products and 30% capacity to produce chemical products.
