PSO Partners with Sinopec and Saudi Aramco for a $10 Billion Refinery and Petrochemical Complex in Pakistan
In a significant move to bolster its energy sector, Pakistan State Oil (PSO) has initiated talks with Chinese petrochemical giant Sinopec for the establishment of a cutting-edge refinery and petrochemical complex in Pakistan. This ambitious venture is set to be in collaboration with the renowned Saudi Aramco, marking a tripartite alliance that could redefine the region’s energy landscape.
Syed Muhammad Taha, Managing Director/CEO of PSO, has formally reached out to Yu Baocai, President of Sinopec Corp, with a proposal to set up a greenfield refinery and petrochemical plant within Pakistan. This initiative, as reported by Business Recorder, not only aims to enhance the country’s refining capabilities but also to meet the surging energy demands anticipated to double by 2035.
The envisioned joint venture between PSO and Saudi Aramco is expected to boast a processing capacity exceeding 300,000 barrels per day. This capacity is set to yield a wide array of high-value petroleum products, positioning Pakistan as a key player in the global energy market. The project, valued at approximately $10 billion, is a testament to the growing economic ties between Pakistan, China, and Saudi Arabia.
To make this project more appealing, the Pakistani government has laid out a series of incentives. These include a 20-year tax holiday, 7.5 percent deemed duties for 25 years on gasoline and high-speed diesel production, and exemptions from taxes on imported equipment for the setup of this plant. Such measures are indicative of Pakistan’s commitment to fostering a conducive environment for foreign investment in its energy sector.
Taha emphasized the strategic importance of this venture for Sinopec, highlighting the opportunity to establish a timely and strategic presence in a market poised for exponential growth. The PSO MD has also expressed openness to exploring various partnership models, such as joint ventures, build-operate-transfer agreements, and technology licensing, to ensure the project’s success and mutual benefit.
The government of Pakistan is also in the process of drafting a new policy framework to further attract and secure the involvement of Saudi Aramco and Sinopec in this monumental project. This comes on the heels of a meeting between Pakistan’s Deputy Ambassador to China and representatives from Sinopec, underscoring the high-level diplomatic engagements aimed at bringing this project to fruition.
This initiative is more than an industrial venture; it’s a strategic alliance that could significantly impact Pakistan’s economy, energy security, and environmental sustainability. By attracting giants like Sinopec and Saudi Aramco, Pakistan is not only looking to meet its future energy demands but also to position itself as a pivotal energy hub in the region