KARACHI: A Chinese proposal to set up a refinery along with a downstream petrochemical complex near Karachi is advancing steadily as requests for 500-1,000 acres has been submitted to the provincial governments of Sindh and Balochistan.
The estimated cost of the project is about $4 billion.
This was disclosed by Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Zubair M. Tufail after a meeting with the visiting Chinese delegation, led by Ms Li-Jial, Director Tianchen Engineering Corporation (TCC), at the Federation House on Wednesday.
Ms Li-Jial and Mr Tufail agreed in principle to establish and exchange investment missions to further enhance trade relations between the two countries.
The Chinese asked for land in Karachi since they found rents in Gwadar Free Zone to be too expensive, . “Port Qasim does not have enough space for a project of this size,” he said. “So they have asked for land a few kilometres away or in the Hub area, which falls in Balochistan”.
They will go with whichever provincial government best facilitates their interests, Mr Tufail added. “Any of the two provincial governments give better deal they would go for it and this would be a win-win situation for both the countries.”
Mr Tufail said both the provincial governments are interested in this project but would depend how they make a land deal with the Chinese investors.
The complex envisions a number of jetties, a refinery with 10 million tonnes per year capacity, as well as downstream processing facilities for naphtha and its component chemicals. “Currently we are importing $2bn worth of these chemicals from the Middle East” Mr Tufail said, adding that the complex could help reduce Pakistan’s external deficit.
Building of the complex will take four to five years, he said, “since they’re starting from scratch”.
Talks on the proposal have been under way for over a year now, but the proposal has begun to take shape more recently with the formal submission of a request for land.
Ms Li-Jial speaking on the occasion said that TCC would like to invest in Pakistan to enhance investment opportunities.
“Over the years, China had been extending cooperation in different sectors of the economy in Pakistan and lately there had been a sudden jump in these relations for the mutual benefit of both countries,” she added.
The FPCCI president said that Pakistan could benefit from the TCC’s vast experience in oil refinery, energy, chemical complexes and other projects and explore investment opportunities mutually beneficial to both the countries.