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MoU signed for $5bn oil refinery at Khalifa Point

Staff Report

ISLAMABAD: The governments of Pakistan and the UAE on Tuesday signed a Memorandum of Understanding (MoU) worth $5 billion for establishment of an oil refinery at Khalifa Point in the coastal area near Hub Balochistan.

The MoU was signed in presence of the Prime Minister Shaukat Aziz, Secretary of Petroleum and Natural Resources Farrukh Qayyum and Managing Director of International Petroleum Investment Company (IPIC) signed the implementation agreement of Khalifa Coastal Refinery.

According to the agreement the IPIC of Abu Dhabi and Pak Arab Refinery Limited (PARCO) would jointly set up 200,000-300,000 barrels per day refinery. Initial equity of the PARCO would be 26 percent while 74 percent equity would be shared by the IPIC.

Before signing of the MoU, the UAE delegation, headed by Mohammad Bin Dhalen Al- Hamili, Minister for Energy UAE meet with the Prime Minister Shaukat Aziz at Prime Minister’s House here. The prime minister had termed the agreement was an historic in the history of Pakistan where the government was receiving the biggest ever Foreign Direct Investment (FDI) of $5 billion for the establishment of an oil refinery. The signing of MoU between the governments of Pakistan and United Arab Emirates (UAE) for the establishment of the refinery reflects confidence of foreign investors over the investment friendly policies of the government, he added.

The Prime Minister said that the reforms agenda and macro-economic policies of Pakistan are based on liberalization, deregulation, privatization and transparency of governance. These policies have made Pakistan an ideal country for investments and today’s singing of the MoU for establishment of oil refinery worth $5 billion speaks for itself of those policies.

While highlighting the close eternal ties between Pakistan and the UAE, the Prime Minister said that the relations between the two countries are based on shared faith, history and commonality of views and Pakistan always feels proud of its friendship with the UAE.

Saukat Aziz said that the signing of MoU was a symbol of friendship between the two countries. This refinery would not only fulfill the domestic needs but also cater to the international demand. IT would help in creating new jobs and also fill the gap of energy demand.

Mohammad Bin Dhalen Al-Hamili appreciated the government of Pakistan’s reform agenda and economic policies, which had led Pakistan to become a destination of choice for investments. He said that the relations between the two countries were time tested and would further grow in future. He said that this was the biggest ever investment made by the UAE government and expressed confidence that the UAE would invest more in Pakistan in future. The meeting was further informed that upon completion of the project, Khalifa Point area would be developed in a new city with all civic amenities and related infrastructure. The development of port infrastructure in the form of Single Point Mooring at Khalifa Point would handle additional petroleum products in the country and would provide 1.4 million tons of additional POL storage capacity. This project would generate employment for 10,000 people during construction phase and direct employment for 1,000 persons and indirect for more than 3,000 during operational phase.

The meeting and the signing ceremony was also attended by the minister for Petroleum & Natural Resources Amanullah Khan Jadoon, Advisor to Prime Minister on Finance Dr. Salman Shah, Minister of State for Petroleum & Natural Resources Mir Mohammad Nasir Mengal, Ambassador of UAE in Pakistan Ali Mohammad Bin Hammad Al Shamsi and Pakistan Ambassador in UAE Ehsanullah Khan and other high officials of the two sides.

The Prime Minister told the delegation that the size of the economy has doubled and GDP was growing at an average of 6-8% per annum thus reducing poverty, increasing per capita income to $1000, generating more employment opportunities and improving the standard of living of the people resulting in growing middle class in the country.

While referring to the demographic situation of Pakistan, the prime minister said that out of a total population of 160 million people, 100 million were below the age of 25 and by imparting them with necessary job skills, this would be an asset for the country and it would be a great attraction for the foreign investors. He said this year alone 100,000 people had been trained in different disciplines through National Vocational and Technical Education Commission to contribute towards the development of national economy.

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