By Rahul Kumar New Delhi, December 30th, 2018: Saudi Arabia, in a major blow to China Pakistan Economic Corridor, has moved its planned refinery, located at Gwadar port, to Hub, an industrial area near Karachi.
The announcement of the refinery was made during Crown Prince Muhammad bin Salman, Saudi Arabia’s crown prince to Pakistan in February 2019, with $20 billion of investments between the countries.
The Saudis decided to transfer the refinery to Hub, despite not making any progress on it, which was itself a $10 million project.
BBC Urdu reported from Pakistan that officials in the Hub project confirmed to BBC Urdu that there are infrastructural issues and feasibility problems in Gwadar that have led to the construction of the Hub oil refinery.
According to reports, the Kingdom lost interest due to the downturn in bilateral relationships with Pakistan and its overactive foreign policies within the Islamic World.
It was intended to make petrol and diesel, but it also had other purposes.
The refinery was to have a Deep Conversion Refinery, a complex of petrochemicals under which would also be produced lubricants.Nikkei Asia had also reported that Gwadar had infrastructure gaps.
BBC Urdu quotes unidentified sources in the Pakistani oil and gas industry, stating that plans to build a refinery at Gwadar were not feasible.Aramco did a feasibility study and found it necessary to build a pipeline connecting Gwadar and Karachi in order to transport products from the refinery.This made the project untenable.To transport the refined oils products, tankers would have been an additional cost to Gwadar’s refinery.
Gwadar has become a less attractive investment location due to the alienation of local Balochs and rising Chinese attacks on Chinese nationals who are working on CPEC.
Experts argue that this shows that Gwadar port, the jewel of China’s CPEC as well as the ‘Singapore of Pakistan’–has infrastructure deficiencies that prohibit investment.
The pace of CPEC projects in Pakistan has slowed significantly.
Tahir Abbas (Head of Research at Arif Habib Limited) stated that it is important to consider whether the future prospects of any potential investment.
He said, “After the refinery is established, what products will be used when the government of the country works to promote hybrid and electric vehicles?”
Now that the move of the refinery is almost complete, Pakistan plans to do a feasibility study on Hub.Pakistan State Oil, the state oil marketing company has apparently contacted Saudi Arabian company Aramco to set up the Hub refinery.
Relocating the Saudi project also points to unease about the $62 Billion CPEC between China and Pakistan.
(The content of this article is carried in accordance with Indianarrative.com
–indianarrative
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