UAE willing to start Khalifa Refinery Project in Pakistan

Pakistan’s Ambassador to United Arab Emirates Jamil Ahmed Khan said UAE was willing to start its Khalifa Refinery Project in Pakistan, involving a huge amount of $6 billion investment. “The project was lingering on due to different reasons, but in a recent Joint Ministerial Commission (JMC) of Pakistan and United Arab Emirates (UAE) in Dubai, UAE has expressed its willingness to start work on this mega project,” Jamil Khan said while talking to senior journalists and FPCCI representatives at Federation House on Wednesday. Khan gave a comprehensive presentation to FPCCI representatives about potential of trade and investment in UAE and progress relating to recent meeting of Pak-UAE Joint Minister Commission (JMC). He said establishment of a 500-MW power project was also part of the Khalifa Refinery Project.
According to history of the project, the proposed Khalifa Coastal Refinery will be established in Khalifa Point at Hub, Balochistan, near Gaddani coastal area. It would span on 1,800 acres and will be the largest single foreign direct investment ever, if the project is materialised. The project had been put on hold several times since 2007 due to various issues, like lack of gas supply, security, poor governance and circular debt, which has affected IPIC’s other investments in Pakistani energy sector.
The refinery will have a capacity of 250,000 barrels per day, equal to 13 million tonnes of petroleum products per year. The project was approved by the government of Pakistan in October 2007, but it could not be initiated due to various reasons.
Owners of the refinery will be Pak-Arab Refinery (PARCO 24 per cent) and International Petroleum Investment Company of Abu-Dhabi (IPIC 76 per cent). Pakistan’s Ambassador to UAE Jamil Khan further said UAE had also extended its support to Pakistan to finalise the Free Trade Agreement (FTA) with Gulf Cooperation Council (GCC) that would prove a breakthrough in Pakistan’s economic and trade ties with GCC. GCC is a member organisation of countries situated in the Gulf and it is just like the European Union.
“In the upcoming third meeting, expected in April, we will try our best to achieve the task of signing FTA with GCC,” he added. Once we achieve this task, Pakistan will be able to increase exports to GCC. Mr Khan said Pakistan had demanded uniformed tariff of 5 per cent on exports to GCC. At present, he said, different countries in the umbrella of GCC charge different tariffs on exports from Pakistan, ranging up to 10 per cent, excluding additional duty and tariff. He said after the signing of FTA, Pakistan is expected to get uniform tariff and may be lower than the existing tariff of 5 to 10 per cent. He further pointed out that during recent JMC, Pakistan had asked UAE officials to provide multiple visas to business for more than six months period.
He said UAE had reduced the timeframe of multiple visas from six to three months for all countries in the world, but Pakistan had demanded relaxation in this condition and more than six months multiple visa for the businessmen. Pakistan’s ambassador to UAE also said during recent JMC that both countries have decided to form a joint Business Council platform to promote their economic and trade ties. Pakistan and UAE would soon nominate 10 members each for formation of the council, he added. He urged FPCCI representatives to explore trade and investment avenues in UAE that imported about $160 billion dollars goods in 2010 and exported products worth $250 billion.
Quoting an international study, Mr Khan said by the year 2020, trade flows between the Gulf region and China could soar to $350 billion (from $59 billion in 2005). Meanwhile, he said, JP Morgan estimates that the global liquidity has increased by $3.9 trillion in GCC from 2002 to 2009, of which around 50 per cent came from Asia and 40 per cent from the oil producers. He said there was enormous potential of growth in trade with GCC, especially United Arab Emirates.