Pakistan to establish oil city and LNG terminal

30-Oct-06

The Pakistani government plans to establish an 'oil city' with an investment of $US40 billion at Gwadar Port to make it the biggest crude and refined oil storage base in the region, allotting 12,500 acres of land to the project. The land will be made available on lease at nominal rates to interested parties for setting up refineries or making investment in oil logistics and storage facilities. The project is planned to be complete in two phases. In phase-1, a 'petrochemical city' at an initial investment of US$12.5 billion, including a refinery, along with petrochemical, oil logistics and storage complexes, will be set up. In first three years, the refinery will be able to refine 10.5 million tons of oil annually. The capacity of this refinery will be increased to up to 21 million tons in 7-9 years. News indicates that the Chinese Petroleum Chamber plans to invest the US$12.5 billion in the project. In addition to it, some companies from the Middle East have also shown interest to set up refineries at Gwadar Port. A consortium, including Dana Gas Single Buoy Moorings (SBM) and US-based Granada Group, has signed an agreement to develop a liquefied natural gas (LNG) terminal in Karachi at an estimated cost of US$200 million, with an initial capacity of 3.5 million tpa.