Islamabad: Pakistan's Minister of State for Petroleum Musadik Malik said on Thursday that four Pakistani public entities signed three memorandums of understanding to raise the necessary local equity for a multibillion-dollar Saudi refinery project, as well as an engineering, procurement, and construction contract with a Chinese firm, according to Arab News.

The USD 12 billion Saudi project, with a capacity of 3,50,000-4,50,000 barrels of crude oil per day, was first agreed upon during Saudi Crown Prince Mohammed bin Salman's 2019 visit to Islamabad.

Pakistan State Oil, Oil and Gas Development Co., Pakistan Petroleum Ltd., and Government Holdings Private Ltd. signed three MoUs to raise the required local equity, while the EPC agreement was inked with China National Offshore Oil Corp. and Pakistan’s Monarch International, Arab News reported.

“In our earlier discussions [with Saudi authorities] there were two issues, one was obviously, who are the other equity partners, so Pakistan firmly believed that if Pakistan thinks that this is a viable project, then Pakistan should put its own equity into the project,” Malik told Arab News on the sidelines of the MoU signing ceremony.

“So, we have put together equity partnerships in excess of 40 to 45 per cent as of right now.”

“As I said, we are in the final stages, which means we basically are at the spreadsheet level, trying to take out all the wrinkles that are there or that are possible, so that a world-class refinery of about 3,00,000 barrels can be set in Pakistan,” he added.

“PSO is taking the lead in local equity with 25 per cent and other firms also committed 5 to 10 per cent which makes our equity share more than what is required.”

Malik said the Pakistan government had brought in the best Chinese company for the purpose of Engineering, Procurement and Construction (EPC) contracts, Arab News reported.

“We have already brought to the table world-class refinery EPC construction partners who are also going to take a position in the equity,” he said.

Malik added that after the announcement of the new refinery policy, the government had also initiated talks with the UAE and Azerbaijan for investment in the sector.