Pakistan's Cabinet Thursday gave nod to the signing of a memorandum of understanding with Saudi Arabia to set up a state-of-the-art oil refinery in the southwestern province of Balochistan.
The proposed 500,000-barrel per day refinery is estimated to be completed with an investment of about USD 8 to 9 billion.
The refinery will be set up at Gwadar, a coastal town on the Arabian Sea where China built a deep seaport under the China-Pakistan Economic Corridor.
The Cabinet meeting was presided by Prime Minister Imran Khan. Petroleum Minister Ghulam Sarwar Khan briefed the Cabinet about a Saudi Arabia delegation which had visited Pakistan to explore investment opportunities.
Sarwar told the media that the Cabinet had granted approval of the memorandum of understanding (MoU), which is expected to be signed later this month when Saudi energy minister will visit Pakistan.
He said that the technical aspects of the refinery including its capacity and cost will be decided by the two sides.
Sarwar said the exact location to set up the refinery was already identified when the Saudi delegation visited Gwadar.
The agreement for refinery will be signed between the Pakistan State Oil (PSO) and Saudi government owned-Aramco.
Khan said Pakistan also offered Saudi delegation to participate in the USD 2 billion North-South Gas Pipeline and upcoming bids for 10 petroleum exploration blocks.
Earlier, Dawn newspaper reported that Saudi Arabia had agreed in principle to set up a major refinery in Pakistan's Gwadar area and also showed serious commitment to make investments in other areas of energy sector.
It was stated Sarwar Khan while talking to journalists on Wednesday after a Saudi delegation led by energy adviser Ahmad Hamid Al-Ghamidi visited Gwadar.
The minister, who also held talks with the head of delegation, said Saudi Arabia enjoyed great respect in Pakistan and both the countries had strong bilateral relations that would scale new heights under the present government.
A senior official explained that the visit of the Saudi delegation was of fact finding nature and its level of serious commitment for investments appeared very encouraging.
"We have been successful in generating their strong interest and it would now also depend on our abilities to materialise some of these projects," he said.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)