The Executive Committee (EC) of the Special Investment Facilitation Council (SIFC) recently took a significant step in assessing the investment interest of Chinese company M/s Sinopec in Pakistan’s refinery sector. This development, which transpired during the EC’s meetings held on October 23 and 24, 2023, marks a potentially significant milestone for the country’s energy and petroleum industry.
SIFC’s directives have prompted the Petroleum Division to evaluate Sinopec’s investment interest alongside Saudi Aramco and, if affirmed, to expedite necessary approvals. According to sources close to the Secretary of Petroleum, these directives were issued with the aim of facilitating Sinopec’s involvement in the project.
Additionally, the EC emphasized the importance of identifying other credible parties interested in the venture. These parties are expected to be presented in the upcoming meeting of the Apex Council (AC).
To further enhance the refining capacity within Pakistan, the SIFC EC has asked relevant ministries, divisions, and authorities to determine the capacity, resources, and investment requirements in the refinery sector, both in the short and long term. This comprehensive assessment will include Greenfield and Brownfield projects and involve in-depth discussions.
The issues related to the provision of a virtual LNG pipeline and the optimization of LNG terminals will be addressed by a working group. Furthermore, the classification of projects in the pipeline may be considered under the China-Pakistan Economic Corridor (CPEC) by the relevant Joint Working Group (JWG) of the Ministry of Planning, Development, and Special Initiatives (MoPD&SI). The working group will also consider categorizing “LNG Easy” as a terminal operator for the application of relevant duty exemption.
The EC intends to thoroughly discuss and finalize all mineral-related crosscutting issues, including those related to Reko Diq and Chagai infrastructure development, by inviting all relevant stakeholders, including Finance, Planning, Communications, and Railways, to participate in the working group’s discussions.
In an effort to recover RLNG (Regasified Liquefied Natural Gas) costs diverted to the domestic segment during the winter, the Petroleum Division has been directed to provide an update to the EC.
The EC also seeks an update on the process of seeking exemption from Public Procurement Regulatory Authority (PPRA) rules for the approval of Pakistan LNG Limited (PLL) to prevent the curtailment of RLNG supply during the winter of FY 2023-24.
The Petroleum Division has been tasked with reviewing the order of the Sindh High Court regarding the development of the complete project for granite extraction in Nagarparker.
The Energas LNG terminal project will be discussed in detail by the working group, and their recommendations will be shared with the Apex Council.
SIFC’s EC has requested an update on a summary to the Economic Coordination Committee (ECC) for a uniform gas tariff for industrial consumers and a regionally competitive tariff for industrial consumers, to be presented in the next AC meeting.
The Secretary of Petroleum has been directed to develop a gas supply strategy for various sectors, which will involve re-evaluating the existing Merit Order for supply to the industrial and domestic sectors, including the Winter Load Management Plan (LMP) from November 2023 to March 2024. Proposed changes should be finalized in the working group for presentation in the AC.
The Chairman of the Oil and Gas Regulatory Authority (OGRA) and the Secretary of Petroleum will evaluate the possibility of disposing of pending marketing licenses and relaxing the condition of a five-kilometer distance while ensuring safety concerns are addressed, with the results to be presented in the next EC meeting.
The Secretary of Petroleum has been directed to seek input from concerned stakeholders on the inclusion of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline in the Foreign Investment (Promotion and Protection) Act (FIPPA) 2022 at the working group level. Mutually agreed recommendations will be presented in the next AC.
Finally, the Secretary of Law and Secretary of Petroleum have been directed to discuss the amendment proposals in Minerals and Industrial Gases Safety Rules, 2010, and the reduction of port charges in the context of ongoing discussions between LNG Easy and Karachi Port Trust (KPT) at the working group level. Additionally, the issues being faced by KPOGDCL will also be discussed within the working group.
The EC of SIFC is making significant strides in assessing investment opportunities and addressing various challenges within Pakistan’s energy and petroleum sector. These developments signify the commitment to fostering economic growth and facilitating investments in the country.
