ISLAMABAD: Saudi Arabia’s state-owned energy giant Aramco is set to partner with Pakistani companies on a proposed $10 billion oil refinery at Gwadar, industry and government sources said, a move that would bolster Pakistan’s refining capacity and deepen Riyadh‑Islamabad economic ties.
This came just a day after Saudi Arabia stepped forward with a significant vote of confidence in Pakistan’s economy, pledging “full financial support” as the country navigates a treacherous debt repayment cycle and regional instability.
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The assurance came during a high-level meeting between Prime Minister Shehbaz Sharif and Saudi Finance Minister Mohammed bin Abdullah Al-Jadaan which took place the other day. The Saudi minister’s visit coincides with Islamabad’s emergence as a pivotal diplomatic bridge, a role Riyadh explicitly endorsed by expressing trust in Pakistan’s mediation between the US and Iran.
Later yesterday, Saudi Arabia’s Ministry of Defense announced the arrival of a Pakistani Air Force contingent at King Abdulaziz Air Base in the Eastern Sector. a deployment carried out under the Joint Strategic Defense Agreement between the two countries, includig fighter and support aircraft.
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According to sources privy to officials who were briefed on the plan, Aramco will collaborate with Pakistani state and state‑linked energy firms — including Pakistan State Oil (PSO), Oil and Gas Development Company (OGDC/OGDCL), Pakistan Petroleum Limited (PPL) and Government Holdings Private Limited (GHPL) — in a joint venture to build a mega refinery near the deep‑sea port.
Pakistani partners are expected to hold up to 40–45% of equity in the project, with Aramco supplying the remainder and providing technical and commercial backing. Previous reporting on the initiative has described alternating equity scenarios during negotiations, but the current framework emphasises significant local ownership alongside Saudi capital.
The refinery is being designed to process as much as 300,000–400,000 barrels per day, a scale that would materially increase Pakistan’s domestic refining throughput and reduce dependency on refined imports. Proponents say such capacity could help trim the country’s oil import bill and ease pressure on foreign exchange reserves.
The government has reportedly proposed generous incentives for the project, including a 20‑year tax exemption and customs relief, to attract long‑term investment and make the coastal complex commercially viable. Officials and analysts expect a multi‑year buildout, with full commercial operations likely several years after financial close.
The Gwadar refinery sits at the heart of broader strategic and economic initiatives tied to the China‑Pakistan Economic Corridor (CPEC). Saudi involvement — first flagged during high‑level visits in 2019 and revived in subsequent years — is being framed by Islamabad as both an economic lifeline and a signal of renewed investor confidence in Pakistan’s energy sector.
Officials cautioned that terms remain subject to final negotiations and formal agreements; no single authoritative government statement confirming the complete financing package or definitive project timetable has been released as of now.
