Pakistan: MoU signed for $10b oil refinery project

ISLAMABAD: Pakistan is set to witness a new oil refinery project with an investment of over $10 billion.

The greenfield refinery project received signatures on its memorandum of understanding (MOU) on Thursday in Islamabad.

According to Federal Minister for Petroleum Mussadik Malik, the Pakistan State Oil (PSO), the Oil and Gas Development Company Limited (OGDLC), the Pakistan Petroleum Limited (PPL) and the Pak-Arab Refinery Company Limited (PARCO) will be investing in the greenfield refinery project.

Malik, a central leader of the Pakistan Muslim League-Nawaz, disclosed that 50% of the investment in the green refinery project will be made by the Saudi Arabian company.

Read more: Oil prices steady near three-month highs

He stated that work on the green refinery project has been in progress for the past 10 years, and the current government has pushed the project closer to completion.

He further said that the greenfield refinery project will significantly reduce the burden on the country’s foreign exchange reserves.

Meanwhile, oil prices were steady on Tuesday, hovering near three-month highs as signs of tighter supplies and pledges by Chinese authorities to shore up the world’s second-biggest economy lifted sentiment, while weaker Western economic data weighed.

Brent futures were down 4 cents, or 0.05pc, at $82.70 a barrel by 0823 GMT, while US West Texas Intermediate (WTI) crude was stable at $78.74.

The crude benchmarks are on track for their fifth weekly gain in a row, with supplies expected to tighten due to output cuts from the Organization of the Petroleum Exporting Countries (OPEC) and allies.

Earlier-loading Brent contracts are selling above later loadings, a price structure known as backwardation indicating traders see tight supply, with the six-month spread near a two-and-a-half month high.