Pakistan plans to develop oil city in Gwadar

Islamabad: The Pakistan government is planning to develop a massive oil city in Gwadar district in Balochistan province with an aim to host Saudi Arabia’s $10 billion Aramco oil refinery and use it as a platform to mend the dented ties between the two countries.

As per details of the model city, the development will be done on a massive, covered area of 88,000 acres of land, to be used to facilitate infrastructure to refine and process petroleum products. Supply of products will be coming from the Gulf countries and will be used for local consumption. 

“Master plan of the city is underway and it may be ready by the end of 2021,” said a government official. 

“The planning of the mega oil city, which will host an Aramco refinery and petrochemical complex, is in progress, and we will take six to seven months to complete the master plan,” confirmed Shahzeb Khan Kakar, Director General of Gwadar Development Authority (GDA). 

Pakistan and Saudi Arabia had signed multiple investment deals in 2019 after Saudi Crown Prince Mohammad Bin Salman visited the country. 

The investment agreements worth $21 billion included minerals, energy, petrochemicals, food and agriculture projects. The companies made part of the deals included Aramco, ACWA Power and the Saudi Fund for Pakistan. 

As per details, Aramco will be developing a refinery with a capacity of 260,000 to 300,000 barrels per day. The refinery is expected to be ready within six years. 

“Additionally, there is a $1 billion petrochemical complex coming up, which will boost Pakistan’s petrochemical industry by producing polyethylene and polypropylene,” government officials said. 

The Gwadar port, which is part of the China Pakistan Economic Corridor (CPEC), plans to attract an investment of at least $57 billion in infrastructure and energy projects, making Gwadar the hub of such projects. Gwadar’s geographical location makes it a land of opportunity for Pakistan and China as it would act as a gateway to the Middle East, Europe, Central Asia and Africa. 

Analysts believe that the change in the US administration has forced Saudi Arabia to rethink on its relations with Pakistan. 

“Tensions have been dialed down between Pakistan and Saudi Arabia. The flow of investment could resume. But Riyadh is unlikely to tilt back towards Islamabad on the Kashmir dispute,” said Arif Rafiq, a Washington-based strategic analyst. 

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