Heavy investment deals and wide-ranging memorandums of understanding (MoUs) worth $10 billion are expected to be inked between Pakistan and Saudi Arabia during Saudi Crown Prince Muhammad bin Salman’s much-anticipated visit to the country on November 21, sources revealed on Monday.
Some of these projects which cost around $4 billion have been already agreed upon in principle, while more projects will be discussed and decided today (Tuesday) in a meeting chaired by Finance Minister Ishaq Dar.
Meanwhile, a separate investment of $12 billion is expected if the two countries proceed with the plan to set up an oil refinery in the country.
Similarly, the Saudi de facto leader is also expected to announce an additional bailout package of $4.2 billion for Pakistan, which includes additional reserves of $3 billion and the oil facility on deferred payment.
Sources said that the MBS visit would also mark the initiation of hefty Saudi investments in Pakistan, and multiple Saudi petroleum agreements would also be finalised. An agreement on the establishment of an oil refinery by KSA is also expected amid the visit.
In this regard, an important meeting will be held today under the chairmanship of Finance Minister Ishaq Dar at 4pm. The meeting will be attended by important officials of the Saudi Embassy and officials of the relevant ministries of the Pakistani government.
Earlier, The Board of Investment (BOI) held a one-and-a-half-hour meeting with the Saudi Ministry of Investment through a video link. The Saudi deputy minister for investment had also participated in the meeting, sources shared.
More importantly, the sources indicated that the visit of the Saudi prince will also see investment in the establishment of a state-of-the-art deep conversion refinery along with a petrochemical complex in Gwadar — a potentially revolutionary step for Pakistan’s economy and its dependence on the import of petroleum products.
In this regard, Prime Minister Shehbaz Sharif has also issued instructions to the concerned authorities to finalise the refinery standards and possible conditions.
Pak-Arab Refinery Company (Parco) and Pakistan State Oil (PSO) will also partner with the Saudi oil giant Aramco on the $12 billion project. According to the sources, the work on all conditions and technical standards will be completed before the visit of the Saudi prince.
It is understood that after the construction of the refinery – expected in 2028 – Pakistan will become self-sufficient in the production of petroleum products.
The petroleum refinery project which was stalled in 2019, will be based on state-of-the-art deep-conversion technology to be introduced in Pakistan that operates five main petroleum refineries, generally using obsolete process technologies and currently planning for technological upgradation and capacity expansion.
Besides, an investment agreement is also expected for the new motorway project costing around $5 million from Nowshera.
Likewise, an agreement worth $500 million for the construction of King Salman Hospital in Islamabad is also on the cards. Sources also said that an agreement with Saudi Arabia to invest in two hydropower projects worth $500 million in Azad Jammu and Kashmir is also expected.
Meanwhile, sources also hinted at the possibility of an agreement on the Saudi investment in the desalination project for the supply of clean drinking water in Karachi. The Sindh government has also requested the federal government for a financial partnership on this project.
Moreover, Saudi authorities are also expected to sign an agreement for an investment in the establishment of a science park at the NED University of Engineering and Technology. The project will cost up to $60-70 million.