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ISLAMABAD: Pakistan has offered Saudi companies tax-free oil storage facilities and investment opportunities in a proposed petroleum storage and refining complex at Hub, Balochistan, as Islamabad seeks to deepen energy cooperation with Riyadh, diversify crude supply routes and strengthen its position as a regional energy hub amid geopolitical uncertainties.
The proposals came under discussion during a meeting between Federal Minister for Petroleum Ali Pervaiz Malik and Saudi Ambassador to Pakistan Dr Rajeh bin Tami Al-Baqami on Friday, with both sides exploring cooperation in strategic oil reserves, refinery upgradation, crude oil procurement and dedicated liquefied petroleum gas (LPG) shipments.
Malik highlighted Pakistan’s newly approved tax-neutral bonded policy, which would allow Saudi companies to maintain commercial oil reserves in the country without incurring local tax liabilities. The framework, benchmarked against international energy hubs such as Fujairah and Singapore, is designed to attract foreign investment in petroleum storage and provide greater flexibility in supplying regional markets.
The minister said the proposed arrangement could help Saudi Arabia diversify maritime transit risks associated with the Strait of Hormuz and Bab el-Mandeb while improving access to Asian markets. He also outlined plans to establish a major petroleum storage and refining complex at Hub in Balochistan, which is expected to accommodate Very Large Crude Carriers (VLCCs) and enhance Pakistan’s capacity to handle large-scale crude oil shipments. The proposed project, being developed under the guidance of Technip Energies UK, is envisaged as a regional energy corridor serving markets in Central Asia and China. The minister said the initiative was being pursued with the support of the prime minister and the chief of defence forces.
Discussions also focused on attracting Saudi investment in Pakistan’s refinery upgradation programme, which aims to modernise existing refineries, improve operational efficiency and facilitate a transition towards Euro 5 fuel standards. Malik said the programme offered significant opportunities for Saudi companies to participate in upgrading the country’s refining infrastructure.
On immediate energy requirements, the petroleum minister thanked Saudi Arabia for prioritising crude oil shipments to Pakistan through Yanbu port during recent disruptions in international energy markets. He said Pakistan was also coordinating with Saudi Aramco to explore increased crude oil procurement and arrange dedicated LPG shipments, particularly ahead of an anticipated rise in domestic gas demand during the winter season.
The discussions assumed added significance amid geopolitical tensions and disruptions to maritime routes, which have highlighted the need to diversify energy supply chains, secure alternative shipping arrangements and expand strategic storage capacity.
The Saudi ambassador reaffirmed Riyadh’s commitment to strengthening economic and energy ties with Islamabad, saying the two countries stood together in all circumstances. He described their defence and energy cooperation frameworks as important pillars for promoting regional peace, stability and economic growth.
In a move aimed at facilitating bilateral exchanges, Al-Baqami also announced that the Saudi Embassy in Islamabad had introduced same-day processing of visa applications for Pakistani citizens to encourage business, cultural and people-to-people interactions.
Separately, Malik invited Saudi Vice Minister of Mining Khalid al-Mudafier to attend the Pakistan Minerals Investment Forum scheduled for November 12-13 in Islamabad, highlighting further opportunities for Saudi investment and cooperation in Pakistan’s mineral resources.
