The United Arab Emirates (UAE) has decided to proceed with the construction of the Khalifa Coastal Refinery project –a 250,000 bpd oil refinery to be built at a cost of US$5 bln in Pakistan’s southwestern Balochistan province. The global recession had compelled the postponement of the project in January amid a row over management issues with Islamabad. As key contentious issues have been resolved, the project seems ready to be flagged off.
The Khalifa Coastal Refinery project is a joint venture between the Abu Dhabi state-owned International Petroleum Investment Company (IPIC) and the Pak-Arab Refinery Limited (PARCO), which is jointly owned by Pakistan and Abu Dhabi. PARCO will hold 24% stake and IPIC will hold the balance. The Pakistani government will own 60% of PARCO’s share. PARCO is reported to have approved initial funding of US$500 mln as part of its contribution to start the project, with an immediate release of US$13 mln to start subcontracting work related to the implementation of the KCR project. With the completion of the refinery, Pakistan’s capacity would be doubled from the current 248,506 bpd.