In a fresh development, the Chinese firm East Sea Group Limited (ESGL) has initiated plans to set up a $4.5 billion oil refinery in Gwadar with an annual oil processing capacity of 8 million tonnes. The project is to be constructed in two phases, the first phase will have an annual refining capacity of 5 million tonnes. Reported Gwadar pro on Monday.
According to sources, the ESGL will place at least six crude oil tankers per month at Balochistan’s Gwadar port, starting with its oil resources business and encouraging major oil producers in the Middle East. It will also provide oil delivery services to other countries.
Fang Yulong, CEO of STC Group, who is also the senior vice president of Pakistan China Joint Chamber of Commerce and Industry (PCJCCI), during a briefing in the Think Tank session at the PCICC Secretariat announced the launching mega project of building “Gwadar Petroleum Storage and Transportation Trading Centre”. According to the reports, constructing an oil refinery was discussed in June 2022, in a meeting between China Overseas Ports Holding Company (COPHC) Chairman Zhang Baozong and Pakistan Prime Minister Shahbaz Sharif.
It is considered to be a major development between the two countries while the Baloch insurgent groups are yet to respond as they strictly opposed the Chinese investment in Balochistan and launched several lethal attacks, including a suicide bombing on Chinese installations and important business hubs in different parts of Balochistan, including Pakistan’s largest city, Karachi.
In the first meeting of the committee on June 27, followed by several meetings chaired by Secretary Petroleum Division, all stakeholders within the government system expressed their full support and readiness to facilitate the refinery.
According to sources from Pakistan’s Ministry of Energy (Petroleum Division), the proposal revealed that the refinery would provide Pakistan with ample storage capacity, which would enable it to maintain reserves for a longer period and safe foreign exchange.
Furthermore, the proposal sought the help of relevant government departments to formulate a broad-based policy framework for the implementation of the project and facilitate its subsequent implementation.
As per sources, Pakistan is considering the newly launched Chinese oil refinery as an opportunity to open up foreign investment in Balochistan which is considered to be a troubled area due to the ongoing independence movement.
The report says, in January 2019, Saudi Arabia’s Energy Minister Khalid Al-Falih announced that the Arab nation is planning to develop a $10 billion oil refinery in the deep-water port of Gwadar. However, this plan was withdrawn. Later, it was vaguely hinted that an oil refinery could be set up somewhere else in Pakistan instead of Gwadar.
According to sources, a few days ago, Saudi Arabia moved once again by signaling its engagement in Gwadar. In addition to this, On October 27, Pakistani Federal Finance Minister Ishaq Dar also held a virtual meeting of the first joint economic sub-committee of the Saudi-Pakistan Supreme Coordination Council with Saudi Arabia’s Energy Minister.
On the other hand, the UAE has also agreed to set up a major transformation, a state-of-the-art refinery with a production capacity of 500,000 barrels per day at the Pak-Arab Refinery Corporation (PARCO) in Hub Chowki city of Balochistan.
According to regional analysts, the recent developments, including the renewal of CPEC on a priority basis, the set up of an oil refinery and other engagements in Balochistan will further escalate the conflict between the Baloch insurgents and the Pakistan state. Baloch nationalists seem to go to any extent to shut down Chinese investment in Balochistan as they consider China one of their oppositions which is facilitating the Pakistani forces to crush the independence movement in Balochistan, political analysts said.