ISLAMABAD, (DNA) – Pakistan and Saudi Arabia are likely to ink on Saturday an agreement to install the Saudi Aramco Oil Refinery at the oil city located in Balochistan’s Gwadar district.

Saudi Energy Minister Khalid al-Falih will reach Pakistan on Saturday and sign a memorandum of understanding (MoU) to set up $10 billion oil refinery at the deep seaport which is also the terminal point of the multi-billion dollar China-Pakistan Economic Corridor (CPEC) project.

The Pak Arab Refinery (Parco), a joint venture between Pakistan and Abu Dhabi, is also working on Khalifa refinery project with a total refining capacity of 250,000 barrels per day. At present, Parco is the largest refinery in Pakistan that has refining capacity of 100,000 barrels per day.

Officials said Saudi Arabia and the UAE had announced the same packages for Pakistan and Riyadh was likely to set up a refinery with a capacity of 250,000 barrels per day. At present, the total refining capacity of Pakistan is around 300,000 barrels per day.

The previous Pakistan Muslim League-Nawaz (PML-N) government had allowed the Frontier Works Organization (FWO) to build an oil pipeline from Gwadar to China at an estimated cost of US$10 billion.

Officials believe that Pakistan is going to become a hub of oil trade after setting up these two refineries, which would not only meet Pakistan’s requirement but would also export petroleum products to China.

Annual demand of petroleum products has been forecasted be 50 million tons in 2030 calculated at the GDP growth of 5% because of rising demand of oil due to CPEC activities.

The current demand of petroleum products has been estimated at 29.6 million tons in 2018. In 2029-30, the deficit of petrol and high speed diesel has been estimated to grow to 14 million tons per annum (MTA) and 16 MTA, respectively against the current deficits of 5 MTA and 4 MTA, respectively.

Officials said Pakistan side would also give a list of some other proposed projects to the Saudi delegation. Islamabad wants Riyadh to invest in mineral sector projects like Reko Diq, oil storages in Gwadar and oil pipeline projects in Pakistan.

Pakistan authorities hope that Saudi Arabia would invest US$15 billion in mineral, oil and gas sector projects. Saudi Arabia has also committed annual credit oil facility of US$3.2 billion for three years to support Pakistan’s balance of payment.