Saudi Arabia to set up $10B oil refinery in Pakistan

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audi Arabia's Crown Prince Mohammed bin Salman
Saudi Arabia's Crown Prince Mohammed bin Salman

Saudi Arabia plans to set up a $10 billion oil refinery in Pakistan’s deepwater port of Gwadar, the Saudi energy minister said on Saturday, speaking at the Indian Ocean port that is being developed with the help of China.

Pakistan wants to attract investment and other financial support to tackle a soaring current account deficit caused partly by rising oil prices. Last year, Saudi Arabia offered Pakistan a $6 billion package that included help to finance crude imports.

Beijing has pledged $60 billion as part of the CPEC that involves building power stations, major highways, new and upgraded railways and higher capacity ports, to help turn Pakistan into a major overland route linking western China to the world.

The Saudi news agency SPA earlier reported that Al Falih met Pakistan’s petroleum minister and Maritime Affairs Minister Ali Zaidi in Gwadar to discuss cooperation in refining, petrochemicals, mining and renewable energy. It said Al Falih would finalise arrangements ahead of signing memorandums of understanding.

Since the government of Prime Minister Imran Khan came to power in August, Pakistan has secured economic assistance packages from Saudi Arabia, the UAE and China.

In November, Pakistan extended talks with the International Monetary Fund as it seeks its 13th bailout since the late-1980s to deal with a looming balance of payments crisis.

The Pakistani prime minister’s office had said on Thursday that Islamabad expected to sign investment agreements with Saudi Arabia and the UAE in coming weeks.