Pakistan and Saudi Arabia are set to sign a deal to establish an oil refinery in Pakistan’s southwestern strategic port city of Gwadar, a key route of the multi-billion dollar China-Pakistan Economic Corridor (CPEC), officials said.
The agreement, which is part of a total $10 billion planned Saudi investment in Pakistan, is likely to be signed during the proposed visit of Crown Prince Mohammad bin Salman to Islamabad next month, Pakistani Finance Minister Asad Umar told reporters, adding that several other MoUs would also be signed during bin Salman's visit.
Foreign Ministry spokesman Muhammad Faisal, however told Anadolu Agency that there was no official announcement or finalization of dates vis-a-vis bin Salman's visit.
Local English daily Dawn, quoting Board of Investment head Haroon Sharif, reported that Saudi Arabia was interested in Pakistan’s four sectors -- oil refinery, petrochemicals, renewable energy and mining.
“We are expecting $10 billion plus Saudi investment and the MoUs to be signed in this regard will not be common or vague, but concrete agreements,” Sharif was quoted as saying.
The $10 billion investment will follow a $6-billion package announced by Riyadh in October to ail cash-strapped Islamabad.
According to experts, Saudi Arabia is mostly exporting its oil through its western ports on the Red Sea. Gwadar port will give the kingdom another option.
In September last year, Pakistan had formally invited Saudi Arabia to join the CPEC as a "third strategic partner", however a reported disagreement with China over the inclusion of a third partner in the mega project could not materialize the offer.
Nevertheless Riyadh has agreed to invest in CPEC-related projects. It has already announced the financing of three CPEC projects in the northwestern Khyber Pakhtunkhwa province and Pakistan-administered Kashmir.
The mega project signed in 2014 aims to connect China's strategically important northwestern Xinxiang province to the port of Gwadar through a network of roads, railways and pipelines in order to transport cargo, oil and gas.
The economic corridor will not only provide China with cheaper access to Africa and the Middle East, but will also earn Pakistan billions of dollars for providing transit facilities to the world’s second largest economy.
By Aamir Latif in Karachi, Pakistan