Govt Plans Oil City at Hub with Offshore Facility and Large Storage Complex

Pakistan is working on a plan to develop an integrated oil city at Hub in Balochistan with an offshore Single Point Mooring facility, dedicated crude oil and petroleum product pipelines and sizeable bonded storage facilities, aiming to turn the area into a.

Key points

• Bonded petroleum storage is additionally being considered at other locations, including Port Qasim, Kemari, Gwadar, Kot Addu, Machike and Faisalabad.
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• Separately, Pakistan is working on a framework for Strategic Petroleum Reserves to strengthen energy security and reduce exposure to disruptions in international oil supplies.
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• The project is planned on administration land at Hub that had previously been allocated to Parco for a coastal refinery.

Meanwhile, the proposed project is intended to growth Pakistan's capacity to handle substantial crude oil and petroleum product vessels while reducing pressure on Karachi and Port Qasim, where port limitations restrict the berthing of particularly substantial ships.

For context, the administration has hired consultancy firm Technique to conduct a basic feasibility study of the proposed oil city. After which the administration will decide whether to move ahead with the next phase, the study will assess the project's technical and commercial viability and is projected to be completed within two months. SBP Tells Banks and Fintechs Rapidly Expand Digital Credit.

Notably, the project is planned on administration land at Hub that had previously been allocated to Parco for a coastal refinery. After which the minister directed the business to conduct the initial study and develop the plan further, parco presented the oil city proposal to the petroleum minister during a recent visit to Karachi.

Under the proposal, an offshore Single Point Mooring facility would be established in deep water to allow sizeable crude oil tankers and vessels carrying finished petroleum products to unload their cargo without entering shallow water port facilities.

Meanwhile, the SPM would be connected to the mainland through two dedicated pipelines. While the other would carry finished petroleum products to Port Qasim and connect with the existing White Oil Pipeline network, one would transport imported crude oil to KPT's Kemari facilities.

Notably, the Hub oil city would additionally be linked to the government's renewed customs bonded storage policy. Under the proposed system, petroleum firms and international traders could store imported products in bonded facilities without immediately paying applicable duties and taxes, subject to regulatory requirements.

Bonded petroleum storage is additionally being considered at other locations, including Port Qasim, Kemari, Gwadar, Kot Addu, Machike and Faisalabad. Gulf based firms have reportedly shown robust interest in developing storage facilities at a number of strategic locations.

Separately, Pakistan is working on a framework for Strategic Petroleum Reserves to strengthen energy security and reduce exposure to disruptions in international oil supplies. Consultancy firm Wood Mackenzie has been tasked with conducting a comprehensive study covering the technical, financial, commercial, legal and institutional requirements for establishing strategic storage facilities.

Notably, the study will additionally examine international and regional reserve models, feasible public private partnership structures and the potential employ of existing pipelines, transportation networks and import infrastructure. It will assess short, medium and long term options for expanding Pakistan's strategic petroleum storage capacity, including potential locations and implementation models. Stay Connected with ProPakistani.

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Taken together, the developments around govt Plans Oil City at Hub with Offshore Facility and Large Storage point to a situation that is still moving, and the coming days should bring more clarity.