Pakistan is set to receive around $10 billion from Saudi Arabia to build a large oil refinery in the port city of Gwadar, according to Ministry of Petroleum sources.
Saudi Aramco is expected to take a 60 percent stake in the project, with Pakistani companies covering the remaining 40 percent of the total investment required.
The proposed refinery is designed to produce up to 400,000 barrels of oil per day, significantly expanding Pakistan’s domestic petroleum processing and storage capacity.
Pakistan State Oil, OGDCL, Pakistan Petroleum Limited, and Government Holdings (Private) Limited are all expected to participate in the project alongside Saudi Aramco.
A proposal is under consideration to grant a 20-year tax exemption on all imported machinery required for the construction and operation of the refinery.
Ministry of Petroleum sources confirmed that the tax exemption proposal is intended to attract and secure long-term foreign investment in Pakistan’s energy sector.
Pakistan has also decided to expand its overall petroleum storage capacity as part of broader plans to strengthen the country’s energy infrastructure going forward.
The Gwadar refinery project represents one of the largest proposed foreign energy investments in Pakistan, linking directly to the China-Pakistan Economic Corridor port city.
Meanwhile, Saudi Arabia and Qatar have assured Pakistan of around $5 billion in financial assistance to help ease pressure on the foreign exchange reserves amid upcoming debt repayments.
The development comes as Pakistan prepares to repay approximately $3.5 billion to the United Arab Emirates by the end of April, following a request from Abu Dhabi to settle outstanding liabilities.
The financial support was discussed during meetings in Islamabad between Prime Minister Shehbaz Sharif and Saudi Finance Minister Mohammed bin Abdullah Al-Jadaan.
Senior officials, including Deputy Prime Minister and Foreign Minister Ishaq Dar and Army Chief Asim Munir, also attended the talks.
