Pakistan Plans Oil Storage Partnership with Saudi Arabia, Kuwait and Qatar
**Lahore:** Pakistan is preparing to launch a strategic oil storage scheme in partnership with Saudi Arabia, Kuwait and Qatar to strengthen the country’s energy security and protect against future supply disruptions.
Petroleum Minister Ali Pervaiz Malik said on Sunday that the three countries would store oil on secure Pakistani territory under a bonded arrangement at their own cost and supply the stored resources to international markets.
Under the proposed scheme, Pakistan would have the right to purchase the stored oil during a conflict or major supply disruption by paying for the resources, enabling the country to meet its domestic energy needs without making large upfront investments.
“The commercial bonded scheme, drafted with the help of Aramco and other major companies, has been forwarded to the Economic Coordination Committee (ECC),” Malik said at a press conference in Lahore. He added that the ECC was expected to take a decision on the proposal next week.
The minister said the initiative would help Pakistan enhance its energy security despite limited financial resources. He noted that establishing domestic crude oil reserves sufficient for one month would require around $500 million, while an underground storage system could cost an additional $300–400 million.
Malik said the government would consider making such an investment in the coming months as part of its broader strategy to strengthen strategic petroleum reserves.
Pakistan currently relies on imports for around 90 per cent of its energy requirements. Domestic oil production is approximately 70,000 barrels per day, compared with national demand of around 500,000 barrels per day.
The petroleum minister stressed the need to accelerate domestic oil and gas exploration to reduce the country’s dependence on imported energy. He said Prime Minister Shehbaz Sharif and the field marshal had tasked a leading international company with preparing a comprehensive roadmap for Pakistan’s energy sector, which would be presented to the national leadership in the coming months.
Malik also announced that Türkiye’s Turkish Petroleum was expected to begin offshore drilling operations in Pakistan’s territorial waters soon, describing the development as a potential catalyst for significant foreign investment in the country’s energy sector.
He said tenders for liquefied petroleum gas (LPG) would open on Monday and that arrangements had also been made to issue new gas connections to consumers.
Commenting on recent international developments, Malik said the government had maintained uninterrupted fuel supplies despite disruptions in global oil markets linked to the US-Iran conflict and instability around the Strait of Hormuz.
He said the government had made every effort to shield consumers from the full impact of rising international petroleum prices while providing maximum possible relief despite financial constraints.
Malik said the government had also introduced a transparent petroleum pricing mechanism, with pricing calculations made available through the Oil and Gas Regulatory Authority (OGRA).
The government has recently been revising petroleum prices more frequently in response to fluctuations in international oil markets, following earlier weekly revisions and fuel conservation measures.
Referring to the federal cabinet’s recent approval of a new refinery policy, Malik said the government was also working to resolve long-standing financial challenges in the petroleum sector.
He claimed that the flow of circular debt had been halted and that efforts were underway to clear outstanding liabilities inherited from previous administrations.
The proposed oil storage partnership is expected to provide Pakistan with an additional layer of protection against international supply shocks while reducing the immediate financial burden of developing strategic petroleum reserves.
