Aramco, Sinopec $10 billion refinery project decision hinges on PSO study

WEB DESK: Saudi Aramco and China’s Sinopec are considering investing in a massive $10 billion green refinery or a crude-to-petrochemical complex in Pakistan.

However, their decision hinges on a market study currently being conducted by Pakistan State Oil (PSO), a government-run oil marketing company. According to The News, this study is expected to be completed by December of this year.

During a recent meeting between Pakistani and Saudi officials on August 29, PSO shared that the market study’s findings will play a crucial role in determining whether the project will move forward.

A senior official involved in the meeting confirmed that the outcome of this study will guide Aramco and Sinopec’s decision on whether to proceed with the mega project.

Back in July 2024, PSO’s board allocated up to $3 million for this market study. The Pakistani government has also introduced a new green refinery policy, offering substantial incentives like a 7.5 per cent deemed duty for 25 years and a 20-year tax holiday, aligning with Saudi Aramco’s preferences.

However, Saudi Aramco’s shift away from direct government control and its reduced interest in the global refinery business, which has become less profitable, has led to some hesitancy.

After extensive diplomatic efforts, Saudi Aramco suggested involving Sinopec as an engineering, procurement, and construction (EPC) contractor. Initially, it was planned that PSO, Sinopec, and Saudi Arabia would jointly conduct the market study.

However, it was later decided that PSO would first complete the study on its own, with Aramco and Sinopec making their final decision based on the results.

The study will assess the type of project that should be developed, as well as its cost and capacity.

Additionally, it will evaluate how much of the petroleum products will be consumed within Pakistan and how much could be exported.

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