Pakistan to seal refinery deal with Aramco during Saudi crown prince visit

Pakistan’s Minister for Petroleum, Ghulam Sarwar Khan, in an interview with Arab News at his office in Islamabad, on Thursday. Khan said that KSA is bringing more than $10 bn investment to establish an oil refinery and petrochemical complex in Baluchistan’s deep-sea port city of Gwadar.
Updated 16 February 2019

Pakistan to seal refinery deal with Aramco during Saudi crown prince visit

  • Oil refinery in Gwadar will help save up to $3 bn per annum, petroleum minister says
  • Pakistan imports petroleum products worth $16 bn each year

ISLAMABAD: Pakistan is expecting to sign two memoranda of understanding (MoUs) for an oil refinery and petrochemical complex in the port city of Gwadar during the visit to Islamabad of Saudi Crown Prince Mohammed bin Salman on Saturday, the Pakistani petroleum minister said on Friday.
The deals will see Pakistan join hands with Saudi Aramco, the world’s top oil producer, to set up a state-of-the-art facility worth $10 billion, with a groundbreaking ceremony expected to be performed early next year.
The crown prince is due to arrive in Islamabad on February 16 on a two-day visit that is being seen as the seal on already strong ties between the historic allies. He is expected to sign a range of agreements worth up to $15 billion dollars, including for three power plants in Pakistan’s Punjab province and the oil refinery and petrochemical complex in the impoverished southwestern province of Baluchistan. .
“We are working with full speed on technical and feasibility studies for establishment of the oil refinery and petrochemical complex in Gwadar … and will perform the groundbreaking by early 2020,” Minister for Petroleum Ghulam Sarwar Khan told Arab News in an interview. 
Once established, the project would help the South Asian nation cut its annual crude oil imports by up to $3 billion, in addition to creating thousands of jobs in Baluchistan province.
The country spends more than $16 billion each year on importing 26 million tons of petroleum products, including 800 million metric cubic feet Liquefied Natural Gas (LNG) from Saudi Arabia, the United Arab Emirates and other Gulf countries to fulfill its energy needs and cut its import bill.
Giving details about the proposed oil refinery, the minister said that it will have a per day capacity of 250,000 to 300,000 barrels per day and cost over $10 billion. 
“Saudi authorities have asked us to complete all the initial work on the project on a fast-track as they want to set it up as early as possible,” he said.
Saudi technical teams, including Energy Minister Khalid Al-Falih, have visited Gwadar twice in recent months to examine the site for the oil refinery and petrochemical complex. They have also been briefed by Pakistani officials on security, and law and order in the area bordering Iran.
“We will ensure complete security of Saudi investment and people working on the project … and a detailed security plan for it has already been chalked out with help of the security agencies,” the minister said.
Pakistan currently has five oil refineries that fulfill half of its demand while the remaining is fulfilled through imports
Pakistan and Saudi Arabia have long maintained strong ties and Riyadh has repeatedly come to Islamabad’s financial rescue. Last year, the Kingdom offered Pakistan $3 billion in foreign currency support for a year and a further loan worth up to $3 billion in deferred payments for oil imports to help stave off a current account crisis.
Khan said that the Pak-Arab Refinery Company (Parco) of the UAE was also setting up a separate oil refinery at Khalifa Point, near Hub in Balochistan province. 
“The work on this project is in the advanced stage now as land for it has been acquired and other formalities are being fulfilled expeditiously,” he said.
Exxon Mobil returned to Pakistan last month after 27 years and has started offshore drilling with $75 million initial investments, the minister said, adding: “All results of the drilling are positive so far and we expect huge oil and gas reserves to be discovered soon. More foreign companies are contacting us to invest in offshore drilling and exploration as we are offering them lucrative incentives.”
About the energy mix, he said the country was importing around 800 million metric cubic feet worth $3 billion and wanted to add more 200 mmcf in the next few months to meet increasing demand. 
“Saudi Arabia is also interested in setting up reservoirs for LNG in Pakistan …. this is an ongoing economic cooperation between the two brotherly countries and more Saudi investment will come in Pakistan with the passage of time,” the minister added.


EU safety agency suspends Pakistani airlines’ European authorization

Updated 01 July 2020

EU safety agency suspends Pakistani airlines’ European authorization

  • The step has been taken due to concerns about the country’s ability to ensure compliance with international aviation standards
  • PIA expects the ‘earliest possible’ lifting of suspension after action by the government and the airline

ISLAMABAD: The European Union Air Safety Agency (EASA) has suspended Pakistan International Airlines’ (PIA) authorization to fly to the bloc for six months, the airline said on Tuesday, in a major blow to the country’s flag carrier.
Separately, the safety agency said it took the action due to concerns about the country’s ability to ensure compliance with international aviation standards at all times.
The suspension follows Pakistan’s grounding of 262 of the country’s 860 pilots — including 141 of PIA’s 434 — whose licenses the aviation minister termed “dubious.”
“EASA has temporarily suspended PIA’s authorization to operate to the EU member states for a period of six months effective July 1, 2020 with the right to appeal,” PIA said in a statement. It added it would temporarily discontinue all its flights to Europe.
Confirming the move in an emailed statement, the EASA referred to a recent investigation by Pakistan which it said showed a “large share” of pilot licenses to be invalid.
Pakistan’s grounding of the pilots followed a preliminary report on a PIA crash in Karachi that killed 97 people last month.
PIA said it is in contact with the EASA to take corrective measures and appeal against the decision, adding that it expected the “earliest possible” lifting of the suspension after action by the government and the airline.
The EASA also suspended the authorization of another Pakistani airline, Vision Air International.
Vision Air International did not immediately respond to an emailed request for comment.
Following the EASA’s decision, the UK Civil Aviation Authority said it, too, was withdrawing PIA’s permit to operate from three of its airports, as required under law.
“PIA flights from Birmingham, London Heathrow and Manchester airports are suspended with immediate effect,” a spokesman for the UK authority told Reuters.
The three were major flying destinations for the airline.
Meanwhile, Pakistani pilots and their union, the Pakistan Airlines Pilots Association (PALPA), say there are discrepancies in the government’s list of pilots with licenses deemed dubious and are demanding a judicial investigation.
PIA and private airline Air Blue have also queried the list with PIA saying 36 of its pilots mentioned had either retired or left the airline, while Air Blue said it no longer employed seven of nine pilots on the list.
“It contains names of highly educated and qualified pilots who have passed all the tests,” PALPA’s president, Chaudhry Salman, told Reuters. “We want a fair and impartial resolution to this matter.”
An official at Pakistan’s aviation ministry, Abdul Sattar Khokhar, said they did not have full details of the discrepancies. “The issue is being sorted out in consultation with airlines and civil aviation authorities.”