Pakistan is hoping to import more crude oil from Russia and may use an oil refinery it is planning to build with Saudi financing to process it, Nikkei Asia reported on Tuesday, citing its sources.
Four leading Pakistani oil companies signed a memorandum of understanding with state-owned Saudi Arabian company Aramco last week for a $10 billion integrated refinery petrochemical complex with a crude oil processing capacity of a minimum of 300,000 barrels per day, along with a petrochemical facility.
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This comes as the country has just started importing crude from Russia. The first delivery was made in June under a deal struck by the two nations. The cargo was paid for in Chinese yuan.
“Pakistan plans to increase its oil imports from Russia, which would result in a need for additional refinery capacity in Pakistan,” Nikkei Asia quoted a Pakistani government official privy to the developments as saying. “The proposed refinery in Gwadar will possibly help refine increasing volumes of Russian crude.”
The South Asian nation joined neighboring India in snapping up discounted Russian crude which was banned from Western markets due to sanctions. Importing crude from Russia has been a success, the official added. Saudi Arabia and the United Arab Emirates have traditionally been Pakistan’s main suppliers of oil.
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According to a Reuters report on Monday, some officials and analysts doubt that Pakistan will meet its target for Russian crude to make up two-thirds of its oil imports, due to a shortage of foreign currency and limitations at its refineries and ports.