Saudi Arabia to install oil refinery in Gwadar supplying Pakistan, Cent Asia & China

[khanasifm]

They are just doing it for themselves in its their favor have done it other places they can ship crude oil and processed product from pak will go to pak + China and other countries

China anyway depends on oil for now and also there is big byproduct which will benefit local economy

 

[Taimoor Khan]

https://www.dawn.com/news/1436385/s...s-gwadar-port-briefed-on-development-projects


Saudi delegation visits Gwadar port, briefed on development projects
Ismail SasoliOctober 02, 2018
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Saudi officials are received by government officials in Gwadar. — Photo: press release

A six-member Saudi delegation on Tuesday visited Gwadar, where it was briefed on different developmental activities and projects being executed under the China-Pakistan Economic Corridor (CPEC), officials said.

Led by Ahmad Hameed Al-Ghamdi, adviser of Saudi Arabia’s ministry of energy, industry and mineral resources, the delegation visited different departments of Gwadar port and the port's free zone.

Members of Saudi delegation photographed with govt officials in Gwadar. — Photo: press release


During their visits, the Saudi team was given a briefing on CPEC projects linked to Gwadar port and projects being implemented by the Gwadar Development Authority.

They were also apprised of the facilities and security arrangements extended to investors by the Government of Pakistan, officials at the port told DawnNewsTV.

The Saudi team showed interest in investing in Gwadar and expressed satisfaction over the facilities and security situation in the area.

During the visit, members of the delegation were quoted as saying that there are historical, religious and brotherly relations between Saudi Arabia and Pakistan.

"Saudi Arabia stood with Pakistan in difficult times in the past and will do so in the future as well," the Saudi officials told their Pakistani counterparts.

They said the Saudi government is keen about contributing to the development process in Pakistan.

 

[YeBeWarned]

it will take time but in long term it will be very very beneficial for Pakistan and region .

 

[niaz]

Another one like the finding oil more than Kuwait?

Don’t know why we like to believe every news item, no matter how fantastic and start jumping with joy. Since news about oil refineries keep cropping up again & again, with ‘Euphoric’ statements; let’s analyse the whole situation based on sound economic realities.

Firstly Chinese & Central Asian oil/energy requirements:

I have worked in the Oil industry for more than 40 years and am still a senior member of the American Institute of Chemical Engineers. Despite being retired, I am keeping myself informed about the world oil situation.

Turkmenistan is full of natural gas & Kazakhstan full of petroleum. Central Asia, therefore, does not need any oil from Gwadar going over the land route. For the information of fellow members, Kazakhstan is already an important exporter of petroleum products. Here is an article about it.

Kazakhstan poised to rival Russia over Central Asian fuel market

https://www.reuters.com/article/kaz...-over-central-asian-fuel-market-idUSL5N1T81ZY

China is also investing in an oil refinery in Kazakhstan. The latest news I came across about it is:

ALMA ATA, Aug. 15 (Xinhua) -- An oil refinery in Kazakhstan with a 50 per cent stake by the China National Oil and Gas Exploration and Development Corporation (CNODC) on Wednesday put the second phase of its renovation project to the final test.

http://www.xinhuanet.com/english/2018-08/15/c_137392639.htm

Kazakhstan with 30-billion bbl oil reserves has borders with China, Uzbekistan, Kyrgyzstan and the Caspian Sea. It already has 3 refineries and the 4rth is going to be built.

"Kazakhstan has three major oil refineries - Atyrau, Shymkent and Pavlodar. Pavlodar refinery has already completed its modernization program. Atyrau refinery plans to launch new units by June, while Shymkent is expected to wrap up a modernisation in September.

The refining capacity of all the three plants will increase from 13.8 to 16.5 million tons after modernization of the refinery completes. Production of all types of light oil products, gasoline, diesel fuel and aviation kerosene will increase. All plants will produce gasoline for 2.3 million tons more. The production of diesel fuel will increase for 917,000 tons and aviation kerosene for 539,000 tons."

https://www.azernews.az/region/132214.html


Gwadar to Chinese border is 5950 Km distant whereas distance from Kazakhstan oil fields to Kashghar is less than 1500 km.

Therefore when there is plenty of petroleum & its products available next door, it makes no economic sense to think that CPEC corridor will be used to import the same all the way from Gwadar.

That is why the CPEC was only envisaged for the transit of import & export of dry goods.

Now let’s look at Pakistan scenario. The article in question mentions the world’s 3rd largest refinery. Currently, the 3 largest oil refineries are:

1. Reliance Industries refinery at Jamnagar, India: 1.2-million barrels per day
2. Paraguana refinery complex, Amuay –cardon BajoGrande, Venezuela: 956K barrels per day.
3. SK Energy refinery, Ulsan, South Korea: 850K barrels per day.

To be the world’s 3rd largest, it has to be bidder than SK refinery, in other words, the nameplate capacity must be around 900K bbl per day or more. This is roughly 120 K tons per day. This means that one VLCC of 250K DWT has to be discharged every 2nd day throughout the year. Currently Gwadar port can berth up to 50K DWT ships only. This means 2.5 vessels per day received and discharged!

Unless Gwadar is substantially modified, the operation is beyond the capacity of Gwadar port.

The refinery will generate about 100K tons per day of refined products that need to be transported out. Largest tank trucks carry about 9,000 gallons which is about 30 tons. This means that one would need to ship out about 3,500 trucks every day. Double this number to include dry goods imported and exported out of Gwadar; which is the primary reason for the CPEC; IMHO so much traffic is beyond the capacity of the CPEC project.

The article also states that it would meet Pakistan’s petroleum needs.

Pakistan’s total petroleum consumption is around 450 K bbl per day. Our current refining capacity is already about 250K per day. Recently we heard that Parco is setting up a 250 K bpd refinery at Khalifa point. It means we would have sufficient refining capacity to meet Pakistan demands for the time being. Therefore such a large refinery is not needed for Pakistan for a very long time.

Finally; the first time I came to know about Khalifa Point refinery was in 2007 in the Oil & Gas Journal.

"Pakistan approves Khalifa Point refinery near Hub
10/15/2007
By an OGJ correspondent

KARACHI, Oct. 15 -- Pakistan has approved construction of the $4-5 billion coastal refinery project at Khalifa Point near the Hub area of Balochistan province. Ashfaq Hassan Khan, a briefing adviser to the finance ministry, said preliminary work has begun on the refinery, which will have a capacity of 200,000-300,000 b/d.

The facility would be established as a 74:26 joint venture of Abu Dhabi-based International Petroleum Investment Co. (IPIC) and Pak-Arab Refinery Co. The project is expected to be completed and commissioned by first quarter 2011.

The Ministry of Petroleum and Natural Resources was authorized to sign the implementation agreement with IPIC within a month. Various concessions had been announced for the project, including a 20-year tax holiday, exemption from 5% workers' profit participation, and exemption from 0.5% services charges under the export processing zones rules.

Pakistan also advises Oil & Gas Development Corp. to dedicate at least 80% of the liquefied petroleum gas produced from Chanda field for distribution in the Federally Administered Tribal Areas of northern Pakistan."

https://www.ogj.com/articles/2007/10/pakistan-approves-khalifa-point-refinery-near-hub.html

That was 11 years ago and the construction has not yet even started. ???

A 900 K bpd refinery would cost in excess of $10-billion, no one invests this much money without through feasibility analysis. I would, therefore, dismiss such speculative statements as ‘flights of fancy’ especially when the Saudi delegation has come mainly to investigate the possibilities.

GOP has asked the Saudis to defer payment for 200K bbl per day crude for 3 months it is a ‘Boon’ because this means we would increase our reserves about $1.5- billion. We should be truly thankful if Saudis agree to this request.

 

[farok84]

Another one like the finding oil more than Kuwait?

Don’t know why we like to believe every news item, no matter how fantastic and start jumping with joy. Since news about oil refineries keep cropping up again & again, with ‘Euphoric’ statements; let’s analyse the whole situation based on sound economic realities.

Firstly Chinese & Central Asian oil/energy requirements:

I have worked in the Oil industry for more than 40 years and am still a senior member of the American Institute of Chemical Engineers. Despite being retired, I am keeping myself informed about the world oil situation.

Turkmenistan is full of natural gas & Kazakhstan full of petroleum. Central Asia, therefore, does not need any oil from Gwadar going over the land route. For the information of fellow members, Kazakhstan is already an important exporter of petroleum products. Here is an article about it.

Kazakhstan poised to rival Russia over Central Asian fuel market

https://www.reuters.com/article/kaz...-over-central-asian-fuel-market-idUSL5N1T81ZY

China is also investing in an oil refinery in Kazakhstan. The latest news I came across about it is:

ALMA ATA, Aug. 15 (Xinhua) -- An oil refinery in Kazakhstan with a 50 per cent stake by the China National Oil and Gas Exploration and Development Corporation (CNODC) on Wednesday put the second phase of its renovation project to the final test.

http://www.xinhuanet.com/english/2018-08/15/c_137392639.htm

Kazakhstan with 30-billion bbl oil reserves has borders with China, Uzbekistan, Kyrgyzstan and the Caspian Sea. It already has 3 refineries and the 4rth is going to be built.

"Kazakhstan has three major oil refineries - Atyrau, Shymkent and Pavlodar. Pavlodar refinery has already completed its modernization program. Atyrau refinery plans to launch new units by June, while Shymkent is expected to wrap up a modernisation in September.

The refining capacity of all the three plants will increase from 13.8 to 16.5 million tons after modernization of the refinery completes. Production of all types of light oil products, gasoline, diesel fuel and aviation kerosene will increase. All plants will produce gasoline for 2.3 million tons more. The production of diesel fuel will increase for 917,000 tons and aviation kerosene for 539,000 tons."

https://www.azernews.az/region/132214.html


Gwadar to Chinese border is 5950 Km distant whereas distance from Kazakhstan oil fields to Kashghar is less than 1500 km.

Therefore when there is plenty of petroleum & its products available next door, it makes no economic sense to think that CPEC corridor will be used to import the same all the way from Gwadar.

That is why the CPEC was only envisaged for the transit of import & export of dry goods.

Now let’s look at Pakistan scenario. The article in question mentions the world’s 3rd largest refinery. Currently, the 3 largest oil refineries are:

1. Reliance Industries refinery at Jamnagar, India: 1.2-million barrels per day
2. Paraguana refinery complex, Amuay –cardon BajoGrande, Venezuela: 956K barrels per day.
3. SK Energy refinery, Ulsan, South Korea: 850K barrels per day.

To be the world’s 3rd largest, it has to be bidder than SK refinery, in other words, the nameplate capacity must be around 900K bbl per day or more. This is roughly 120 K tons per day. This means that one VLCC of 250K DWT has to be discharged every 2nd day throughout the year. Currently Gwadar port can berth up to 50K DWT ships only. This means 2.5 vessels per day received and discharged!

Unless Gwadar is substantially modified, the operation is beyond the capacity of Gwadar port.

The refinery will generate about 100K tons per day of refined products that need to be transported out. Largest tank trucks carry about 9,000 gallons which is about 30 tons. This means that one would need to ship out about 3,500 trucks every day. Double this number to include dry goods imported and exported out of Gwadar; which is the primary reason for the CPEC; IMHO so much traffic is beyond the capacity of the CPEC project.

The article also states that it would meet Pakistan’s petroleum needs.

Pakistan’s total petroleum consumption is around 450 K bbl per day. Our current refining capacity is already about 250K per day. Recently we heard that Parco is setting up a 250 K bpd refinery at Khalifa point. It means we would have sufficient refining capacity to meet Pakistan demands for the time being. Therefore such a large refinery is not needed for Pakistan for a very long time.

Finally; the first time I came to know about Khalifa Point refinery was in 2007 in the Oil & Gas Journal.

"Pakistan approves Khalifa Point refinery near Hub
10/15/2007
By an OGJ correspondent

KARACHI, Oct. 15 -- Pakistan has approved construction of the $4-5 billion coastal refinery project at Khalifa Point near the Hub area of Balochistan province. Ashfaq Hassan Khan, a briefing adviser to the finance ministry, said preliminary work has begun on the refinery, which will have a capacity of 200,000-300,000 b/d.

The facility would be established as a 74:26 joint venture of Abu Dhabi-based International Petroleum Investment Co. (IPIC) and Pak-Arab Refinery Co. The project is expected to be completed and commissioned by first quarter 2011.

The Ministry of Petroleum and Natural Resources was authorized to sign the implementation agreement with IPIC within a month. Various concessions had been announced for the project, including a 20-year tax holiday, exemption from 5% workers' profit participation, and exemption from 0.5% services charges under the export processing zones rules.

Pakistan also advises Oil & Gas Development Corp. to dedicate at least 80% of the liquefied petroleum gas produced from Chanda field for distribution in the Federally Administered Tribal Areas of northern Pakistan."

https://www.ogj.com/articles/2007/10/pakistan-approves-khalifa-point-refinery-near-hub.html

That was 11 years ago and the construction has not yet even started. ???

A 900 K bpd refinery would cost in excess of $10-billion, no one invests this much money without through feasibility analysis. I would, therefore, dismiss such speculative statements as ‘flights of fancy’ especially when the Saudi delegation has come mainly to investigate the possibilities.

GOP has asked the Saudis to defer payment for 200K bbl per day crude for 3 months it is a ‘Boon’ because this means we would increase our reserves about $1.5- billion. We should be truly thankful if Saudis agree to this request.

I will greatly appreciate your opinion on following;

1. Can we not use an SPM or two in Gwadar, just like the one we have in Khalifa Point, instead of these vessels docking? I think you mentioned mooring somewhere earlier?

2. What about using rail cars for transportation of these products, instead of trucks? I know we don't have them at the moment, but China has envisaged rail lines linking Gwadar to Kashgar, and also a pipeline, in outlined CPEC projects. They must have a reason for those, specially the pipeline?

3. If China can source cheaper and faster petroleum products from central asia, then why import from other sources. Why don't they just invest more in Central Asia, and increase their petroleum output, by investments in exploration and EO&GR techniques, in contrast to their risky investments in Iranian offshore fields, they have also invested in Canadian and Australian O/G industry. A reasonable argument can be, they are trying to diversify their options to source and meet their current and future energy demands. From general understanding, it is this source part that drove their investments in CPEC, and not the love for Pakistan. A better comparison for this, particularly transportation of the refined products (from KSA's operated refinery), might be to the Chinese imports of KSA's crude and other petroleum products through Malacca straits?

In my opinion, they will obviously conduct a feasibility, but it is up to us to convince them, of our plans to sell and transport these products to a much bigger market, China. Saudi's have come here with pure intention of business, they are not interested in Ummah BS, they have come well prepared and have done their home work, and are looking for good returns on their investment. We should show them, how those returns can be earned.

 

[niaz]

I will greatly appreciate your opinion on following;

1. Can we not use an SPM or two in Gwadar, just like the one we have in Khalifa Point, instead of these vessels docking? I think you mentioned mooring somewhere earlier?

2. What about using rail cars for transportation of these products, instead of trucks? I know we don't have them at the moment, but China has envisaged rail lines linking Gwadar to Kashgar, and also a pipeline, in outlined CPEC projects. They must have a reason for those, specially the pipeline?

3. If China can source cheaper and faster petroleum products from central asia, then why import from other sources. Why don't they just invest more in Central Asia, and increase their petroleum output, by investments in exploration and EO&GR techniques, in contrast to their risky investments in Iranian offshore fields, they have also invested in Canadian and Australian O/G industry. A reasonable argument can be, they are trying to diversify their options to source and meet their current and future energy demands. From general understanding, it is this source part that drove their investments in CPEC, and not the love for Pakistan. A better comparison for this, particularly transportation of the refined products (from KSA's operated refinery), might be to the Chinese imports of KSA's crude and other petroleum products through Malacca straits?

In my opinion, they will obviously conduct a feasibility, but it is up to us to convince them, of our plans to sell and transport these products to a much bigger market, China. Saudi's have come here with pure intention of business, they are not interested in Ummah BS, they have come well prepared and have done their home work, and are looking for good returns on their investment. We should show them, how those returns can be earned.

Hon farok84,

These days Single Point Mooring System (SPM) with the Catenary Anchor Leg Mooring is very common and used at most ports for VLCC loading in shallow and intermediate water depth. The main considerations in its design are the hydrodynamic conditions (water currents and water depth) and the prevailing winds. The problem occurs during the stormy weather because strong winds affect the dynamic stability and loading/unloading are often suspended during severe bad weather.

However, a single SPM may not be sufficient for a 900 K bpd refinery. The slightly larger Reliance refinery (1.24- million bpd) has 5 SPMs (3 with 22-meter draft and 2 with 18.5 meters) at the Sikka port. I would, therefore, guess that about 4 would be needed here.

My main problem, however, remains that China can import as much oil as they want from Kazakhstan, either by pipeline. Or by road. A rail link between Europe & China via Kazakhstan also exists. Thus China does not need to import the petroleum products to be hauled all the way from Gwadar either by road or by rail.


“Co-operation between China and Europe runs through Kazakhstan”

https://www.telegraph.co.uk/news/world/china-watch/business/kazakhstan-links-china-and-europe/

Refineries are normally built either close to the production site or at the ports near the demand centres. Even export refineries such as Essar at Vadinar and Reliance at Jamnagar were justified initially on a base-load domestic demand. For example, Reliance supplies about 5% of India's fuel demand with the target to achieve 10%.

If Khalifa point refinery never gets built, it would improve the Gwadar refinery economic. As the things stand now, I do not believe the$10-billion refinery at Gwadar is an economically viable proposition.

 

[SunilM]

GOP has asked the Saudis to defer payment for 200K bbl per day crude for 3 months it is a ‘Boon’ because this means we would increase our reserves about $1.5- billion. We should be truly thankful if Saudis agree to this request.

Just to clarify, your minister has categorically denied asking for deferred payment. According to him they only asked saudis to invest and its beneath them to ask for deferred payments.

 

[farok84]

Hon farok84,

These days Single Point Mooring System (SPM) with the Catenary Anchor Leg Mooring is very common and used at most ports for VLCC loading in shallow and intermediate water depth. The main considerations in its design are the hydrodynamic conditions (water currents and water depth) and the prevailing winds. The problem occurs during the stormy weather because strong winds affect the dynamic stability and loading/unloading are often suspended during severe bad weather.

However, a single SPM may not be sufficient for a 900 K bpd refinery. The slightly larger Reliance refinery (1.24- million bpd) has 5 SPMs (3 with 22-meter draft and 2 with 18.5 meters) at the Sikka port. I would, therefore, guess that about 4 would be needed here.

My main problem, however, remains that China can import as much oil as they want from Kazakhstan, either by pipeline. Or by road. A rail link between Europe & China via Kazakhstan also exists. Thus China does not need to import the petroleum products to be hauled all the way from Gwadar either by road or by rail.


“Co-operation between China and Europe runs through Kazakhstan”

https://www.telegraph.co.uk/news/world/china-watch/business/kazakhstan-links-china-and-europe/

Refineries are normally built either close to the production site or at the ports near the demand centres. Even export refineries such as Essar at Vadinar and Reliance at Jamnagar were justified initially on a base-load domestic demand. For example, Reliance supplies about 5% of India's fuel demand with the target to achieve 10%.

If Khalifa point refinery never gets built, it would improve the Gwadar refinery economic. As the things stand now, I do not believe the$10-billion refinery at Gwadar is an economically viable proposition.

Thanks for your kind input, much appreciated.

The oil refinery planned seems to be 500k bpd. We have an SBM that Byco operates at Khalifa Point so hydrodynamic conditions can be mitigated. ARAMCO & PSO are going to conduct a feasibility study, hopefully they will come to a conclusion that is best for Pakistan's economy.

 

[BATMAN]

will believe when its happen

Considering the sabotage possibilities by Iranian mafia, i also doubt.

 

[Shah Khalid]

Another one like the finding oil more than Kuwait?

Don’t know why we like to believe every news item, no matter how fantastic and start jumping with joy. Since news about oil refineries keep cropping up again & again, with ‘Euphoric’ statements; let’s analyse the whole situation based on sound economic realities.

Firstly Chinese & Central Asian oil/energy requirements:

I have worked in the Oil industry for more than 40 years and am still a senior member of the American Institute of Chemical Engineers. Despite being retired, I am keeping myself informed about the world oil situation.

Turkmenistan is full of natural gas & Kazakhstan full of petroleum. Central Asia, therefore, does not need any oil from Gwadar going over the land route. For the information of fellow members, Kazakhstan is already an important exporter of petroleum products. Here is an article about it.

Kazakhstan poised to rival Russia over Central Asian fuel market

https://www.reuters.com/article/kaz...-over-central-asian-fuel-market-idUSL5N1T81ZY

China is also investing in an oil refinery in Kazakhstan. The latest news I came across about it is:

ALMA ATA, Aug. 15 (Xinhua) -- An oil refinery in Kazakhstan with a 50 per cent stake by the China National Oil and Gas Exploration and Development Corporation (CNODC) on Wednesday put the second phase of its renovation project to the final test.

http://www.xinhuanet.com/english/2018-08/15/c_137392639.htm

Kazakhstan with 30-billion bbl oil reserves has borders with China, Uzbekistan, Kyrgyzstan and the Caspian Sea. It already has 3 refineries and the 4rth is going to be built.

"Kazakhstan has three major oil refineries - Atyrau, Shymkent and Pavlodar. Pavlodar refinery has already completed its modernization program. Atyrau refinery plans to launch new units by June, while Shymkent is expected to wrap up a modernisation in September.

The refining capacity of all the three plants will increase from 13.8 to 16.5 million tons after modernization of the refinery completes. Production of all types of light oil products, gasoline, diesel fuel and aviation kerosene will increase. All plants will produce gasoline for 2.3 million tons more. The production of diesel fuel will increase for 917,000 tons and aviation kerosene for 539,000 tons."

https://www.azernews.az/region/132214.html


Gwadar to Chinese border is 5950 Km distant whereas distance from Kazakhstan oil fields to Kashghar is less than 1500 km.

Therefore when there is plenty of petroleum & its products available next door, it makes no economic sense to think that CPEC corridor will be used to import the same all the way from Gwadar.

That is why the CPEC was only envisaged for the transit of import & export of dry goods.

Now let’s look at Pakistan scenario. The article in question mentions the world’s 3rd largest refinery. Currently, the 3 largest oil refineries are:

1. Reliance Industries refinery at Jamnagar, India: 1.2-million barrels per day
2. Paraguana refinery complex, Amuay –cardon BajoGrande, Venezuela: 956K barrels per day.
3. SK Energy refinery, Ulsan, South Korea: 850K barrels per day.

To be the world’s 3rd largest, it has to be bidder than SK refinery, in other words, the nameplate capacity must be around 900K bbl per day or more. This is roughly 120 K tons per day. This means that one VLCC of 250K DWT has to be discharged every 2nd day throughout the year. Currently Gwadar port can berth up to 50K DWT ships only. This means 2.5 vessels per day received and discharged!

Unless Gwadar is substantially modified, the operation is beyond the capacity of Gwadar port.

The refinery will generate about 100K tons per day of refined products that need to be transported out. Largest tank trucks carry about 9,000 gallons which is about 30 tons. This means that one would need to ship out about 3,500 trucks every day. Double this number to include dry goods imported and exported out of Gwadar; which is the primary reason for the CPEC; IMHO so much traffic is beyond the capacity of the CPEC project.

I am sorry sir but this is a very silly assumption that China can import Kazakhastan crude easily fact is that daily Kazakh oil production is 1.5 million bpd whereas China imports 9 million bpd.

Chinese need Gulf crude and A Pipeline from Gwadar to Kashgar is a viable option

 

[niaz]

I am sorry sir but this is a very silly assumption that China can import Kazakhastan crude easily fact is that daily Kazakh oil production is 1.5 million bpd whereas China imports 9 million bpd.

Chinese need Gulf crude and A Pipeline from Gwadar to Kashgar is a viable option

Honorable Sir,

Below is the map of Chinese "One belt one road project".

You can see that that in addition to the CPEC; there is another Economic Belt that passes through countries situated on the original Silk Road; that is Central Asia, West Asia & parts of Near East. The oil & gas producing countries of Kazakhstan & Azerbaijan are already connected to China western region as part of this initiative.


You are quite correct in asserting that China imports more than 9-million bpd of crude oil. FYI the latest data available on Chinese imports by the country of origin is:

Quote

China imported 40.8 million tonnes of crude in October, equivalent to 9.61 million barrels per day (bpd), a figure that beat the previous record of 9.60 million bpd from April.

Imports jumped a massive 31.5 percent from the same month a year earlier, and also by 9.6 percent from September, according to customs data.

1. Russia: US$23.7 billion (14.6% of China’s total crude oil imports)
2. Saudi Arabia: $20.5 billion (12.6%)
3. Angola: $19.8 billion (12.2%)
4. Iraq: $13.8 billion (8.5%)
5. Oman: $12.2 billion (7.5%)
6. Iran: $11.9 billion (7.3%)
7. Brazil: $8.8 billion (5.4%)
8. Kuwait: $7.1 billion (4.4%)
9. Venezuela: $6.6 billion (4%)
10. United Arab Emirates: $4.1 billion (2.5%)
11. United Kingdom: $3.6 billion (2.2%)
12. Congo: $3.44 billion (2.1%)
13. Colombia: $3.37 billion (2.1%)
14. United States: $3.2 billion (2%)
15. Malaysia: $2.6 billion (1.6%)

Unquote.

Kazakhstan is not among the above because total exports of crude & petroleum products to China are only just above $1-billion. Even Azerbaijan exported 1.89-billion cubic meters of gas worth about $343-million to China and oil products worth $182-million during January - April 2018.


The Reason for the small import volume from Kazakhstan & Azerbaijan being that most of China's oil refinery as well the industry (major consuming centers) is located in China’s eastern provinces. Should the demand of the western regions such as Xinjiang increase; it can easily be met through imports from the nearby Kazakhstan & Azerbaijan, import via Gwadar would be comparatively far more expensive.

CPEC has an official website. Before I made the comment that you refer; I perused through the project description and even in the long-term plan up to 2030, there is no mention of crude or products pipeline from Gwadar to China.

http://cpec.gov.pk/brain/public/uploads/documents/CPEC-LTP.pdf


You may be right that I have made an assumption; nevertheless, IMHO transport of crude of petroleum products from Gwadar to China by road or via a pipeline is not an economically viable option. However, should you desire to continue believing in this, you are free to do so? It certainly not likely to happen before 2030.

 

[Samlee]

Honorable Sir,

Below is the map of Chinese "One belt one road project".

You can see that that in addition to the CPEC; there is another Economic Belt that passes through countries situated on the original Silk Road; that is Central Asia, West Asia & parts of Near East. The oil & gas producing countries of Kazakhstan & Azerbaijan are already connected to China western region as part of this initiative.


You are quite correct in asserting that China imports more than 9-million bpd of crude oil. FYI the latest data available on Chinese imports by the country of origin is:

Quote

China imported 40.8 million tonnes of crude in October, equivalent to 9.61 million barrels per day (bpd), a figure that beat the previous record of 9.60 million bpd from April.

Imports jumped a massive 31.5 percent from the same month a year earlier, and also by 9.6 percent from September, according to customs data.

1. Russia: US$23.7 billion (14.6% of China’s total crude oil imports)
2. Saudi Arabia: $20.5 billion (12.6%)
3. Angola: $19.8 billion (12.2%)
4. Iraq: $13.8 billion (8.5%)
5. Oman: $12.2 billion (7.5%)
6. Iran: $11.9 billion (7.3%)
7. Brazil: $8.8 billion (5.4%)
8. Kuwait: $7.1 billion (4.4%)
9. Venezuela: $6.6 billion (4%)
10. United Arab Emirates: $4.1 billion (2.5%)
11. United Kingdom: $3.6 billion (2.2%)
12. Congo: $3.44 billion (2.1%)
13. Colombia: $3.37 billion (2.1%)
14. United States: $3.2 billion (2%)
15. Malaysia: $2.6 billion (1.6%)

Unquote.

Kazakhstan is not among the above because total exports of crude & petroleum products to China are only just above $1-billion. Even Azerbaijan exported 1.89-billion cubic meters of gas worth about $343-million to China and oil products worth $182-million during January - April 2018.


The Reason for the small import volume from Kazakhstan & Azerbaijan being that most of China's oil refinery as well the industry (major consuming centers) is located in China’s eastern provinces. Should the demand of the western regions such as Xinjiang increase; it can easily be met through imports from the nearby Kazakhstan & Azerbaijan, import via Gwadar would be comparatively far more expensive.

CPEC has an official website. Before I made the comment that you refer; I perused through the project description and even in the long-term plan up to 2030, there is no mention of crude or products pipeline from Gwadar to China.

http://cpec.gov.pk/brain/public/uploads/documents/CPEC-LTP.pdf


You may be right that I have made an assumption; nevertheless, IMHO transport of crude of petroleum products from Gwadar to China by road or via a pipeline is not an economically viable option. However, should you desire to continue believing in this, you are free to do so? It certainly not likely to happen before 2030.

Salaam Sir,

I Think That Certain Research Has Indicated That Inspite Of Certain Technological and Geophysical Challenges A Pipeline Between and Pakistan and China Is Very Much Viable

https://www.researchgate.net/public...f_Pakistan-China_Energy_and_Economic_Corridor

 

[Blueskiez 2001]

Another one like the finding oil more than Kuwait?

Don’t know why we like to believe every news item, no matter how fantastic and start jumping with joy. Since news about oil refineries keep cropping up again & again, with ‘Euphoric’ statements; let’s analyse the whole situation based on sound economic realities.

Firstly Chinese & Central Asian oil/energy requirements:

I have worked in the Oil industry for more than 40 years and am still a senior member of the American Institute of Chemical Engineers. Despite being retired, I am keeping myself informed about the world oil situation.

Turkmenistan is full of natural gas & Kazakhstan full of petroleum. Central Asia, therefore, does not need any oil from Gwadar going over the land route. For the information of fellow members, Kazakhstan is already an important exporter of petroleum products. Here is an article about it.

Kazakhstan poised to rival Russia over Central Asian fuel market

https://www.reuters.com/article/kaz...-over-central-asian-fuel-market-idUSL5N1T81ZY

China is also investing in an oil refinery in Kazakhstan. The latest news I came across about it is:

ALMA ATA, Aug. 15 (Xinhua) -- An oil refinery in Kazakhstan with a 50 per cent stake by the China National Oil and Gas Exploration and Development Corporation (CNODC) on Wednesday put the second phase of its renovation project to the final test.

http://www.xinhuanet.com/english/2018-08/15/c_137392639.htm

Kazakhstan with 30-billion bbl oil reserves has borders with China, Uzbekistan, Kyrgyzstan and the Caspian Sea. It already has 3 refineries and the 4rth is going to be built.

"Kazakhstan has three major oil refineries - Atyrau, Shymkent and Pavlodar. Pavlodar refinery has already completed its modernization program. Atyrau refinery plans to launch new units by June, while Shymkent is expected to wrap up a modernisation in September.

The refining capacity of all the three plants will increase from 13.8 to 16.5 million tons after modernization of the refinery completes. Production of all types of light oil products, gasoline, diesel fuel and aviation kerosene will increase. All plants will produce gasoline for 2.3 million tons more. The production of diesel fuel will increase for 917,000 tons and aviation kerosene for 539,000 tons."

https://www.azernews.az/region/132214.html


Gwadar to Chinese border is 5950 Km distant whereas distance from Kazakhstan oil fields to Kashghar is less than 1500 km.

Therefore when there is plenty of petroleum & its products available next door, it makes no economic sense to think that CPEC corridor will be used to import the same all the way from Gwadar.

That is why the CPEC was only envisaged for the transit of import & export of dry goods.

Now let’s look at Pakistan scenario. The article in question mentions the world’s 3rd largest refinery. Currently, the 3 largest oil refineries are:

1. Reliance Industries refinery at Jamnagar, India: 1.2-million barrels per day
2. Paraguana refinery complex, Amuay –cardon BajoGrande, Venezuela: 956K barrels per day.
3. SK Energy refinery, Ulsan, South Korea: 850K barrels per day.

To be the world’s 3rd largest, it has to be bidder than SK refinery, in other words, the nameplate capacity must be around 900K bbl per day or more. This is roughly 120 K tons per day. This means that one VLCC of 250K DWT has to be discharged every 2nd day throughout the year. Currently Gwadar port can berth up to 50K DWT ships only. This means 2.5 vessels per day received and discharged!

Unless Gwadar is substantially modified, the operation is beyond the capacity of Gwadar port.

The refinery will generate about 100K tons per day of refined products that need to be transported out. Largest tank trucks carry about 9,000 gallons which is about 30 tons. This means that one would need to ship out about 3,500 trucks every day. Double this number to include dry goods imported and exported out of Gwadar; which is the primary reason for the CPEC; IMHO so much traffic is beyond the capacity of the CPEC project.

The article also states that it would meet Pakistan’s petroleum needs.

Pakistan’s total petroleum consumption is around 450 K bbl per day. Our current refining capacity is already about 250K per day. Recently we heard that Parco is setting up a 250 K bpd refinery at Khalifa point. It means we would have sufficient refining capacity to meet Pakistan demands for the time being. Therefore such a large refinery is not needed for Pakistan for a very long time.

Finally; the first time I came to know about Khalifa Point refinery was in 2007 in the Oil & Gas Journal.

"Pakistan approves Khalifa Point refinery near Hub
10/15/2007
By an OGJ correspondent

KARACHI, Oct. 15 -- Pakistan has approved construction of the $4-5 billion coastal refinery project at Khalifa Point near the Hub area of Balochistan province. Ashfaq Hassan Khan, a briefing adviser to the finance ministry, said preliminary work has begun on the refinery, which will have a capacity of 200,000-300,000 b/d.

The facility would be established as a 74:26 joint venture of Abu Dhabi-based International Petroleum Investment Co. (IPIC) and Pak-Arab Refinery Co. The project is expected to be completed and commissioned by first quarter 2011.

The Ministry of Petroleum and Natural Resources was authorized to sign the implementation agreement with IPIC within a month. Various concessions had been announced for the project, including a 20-year tax holiday, exemption from 5% workers' profit participation, and exemption from 0.5% services charges under the export processing zones rules.

Pakistan also advises Oil & Gas Development Corp. to dedicate at least 80% of the liquefied petroleum gas produced from Chanda field for distribution in the Federally Administered Tribal Areas of northern Pakistan."

https://www.ogj.com/articles/2007/10/pakistan-approves-khalifa-point-refinery-near-hub.html

That was 11 years ago and the construction has not yet even started. ???

A 900 K bpd refinery would cost in excess of $10-billion, no one invests this much money without through feasibility analysis. I would, therefore, dismiss such speculative statements as ‘flights of fancy’ especially when the Saudi delegation has come mainly to investigate the possibilities.

GOP has asked the Saudis to defer payment for 200K bbl per day crude for 3 months it is a ‘Boon’ because this means we would increase our reserves about $1.5- billion. We should be truly thankful if Saudis agree to this request.

So what do u get out of the news popping up?
Is there going to be another refinery in Ghawadar?
And have you any credible source telling that oil drilling is going to start /is startet in Pakistan?

regards

 

[Samlee]

So what do u get out of the news popping up?
Is there going to be another refinery in Ghawadar?
And have you any credible source telling that oil drilling is going to start /is startet in Pakistan?

regards

Yes

https://www.samaa.tv/news/2019/01/e...gas-reserves-in-pakistani-waters-from-friday/

 

[farok84]

Gwadar oil facility has potential to capture China, Central Asian markets
March 3, 2019

ISLAMABAD, Mar 3 (APP):A state-of-the-art oil refinery and petrochemical complex, being established at Gwadar deep seaport city, has tremendous potential to capture markets in China and Central Asian landlocked states where fuel supply takes weeks to reach through other routes.
Under the China Pakistan Economic Corridor (CPEC), the fuel transportation to China via Pakistan would take just seven days as import through western China takes almost 40 days, an official source privy to the Petroleum sector developments told APP.
He said the mega oil facility was being constructed with around US $11 billion Saudiinvestment at the Gwadar deep seaport, an ultimate destination of the CPEC, would also help refine and store imported oil for onward transportation to China and develop fuel supply chain for the landlocked Central Asian states.
Besides, the official said the facility, having capacity to refine 200,000 to 300,000 barrels per day (bpd) oil, would help bring down the country’s oil import bill by US $ 1.2 billion annually.
Pakistan’s average annual oil consumption is around 26 million tons (MT), out of which 13.5 MT was met through local production of eight existing oil refineries. “While, 50 per cent crude oil is imported to meet the energy needs.”
Answering a question, he said soon after singing the Memorandum of Understanding (MoU) for the refinery and petrochemical complex, Pakistan and Saudi Arabia agreed to establish a Joint Working Group (JWG) to ensure timely and smooth execution of the multi billion dollars project.
The official said the JWG would hold regular interaction to exchange information needed
for carrying out feasibility studies of the project on a fast track.
Saudi Arabia, he said, was keen to set up the facilities at the earliest, which was reflected by four visits of Saudi technical teams and Energy Minister to Pakistan to inspect the project site and discuss other modalities, prior to signing of the MoU.
Replying to another question, the official said the government was making all-out efforts to upgrade existing oil refineries and establish new deep conversion facilities to achieve self-sufficiency in this sector.
For the purpose, he said, the government had recently banned import of furnace oil and announced unprecedented incentives package for setting up new deep conversion oil facilities, advising the existing oil refineries to enter into commercial agreements with power producers for utilization of their capacity for furnace oil storage and modernization of their facilities.
The official said an unprecedented incentives package was in place for setting up new deep conservation oil refineries, under which interested parties were exempted from all duties, taxes, surcharges and levies on import besides a 20-year income tax holiday.
“The exemption will be applicable on all machinery, vehicles, plants and equipment, other materials and consumables for setting up, operation, maintenance and repair of a refinery,” he said.
The package, the official said, would also be applicable on existing facilities where refining capacity was expanded by installing deep conversion units with capacity of at least 100,000 barrels per day (bpd) oil.

http://www.app.com.pk/gwadar-oil-facility-has-potential-to-capture-china-central-asian-markets-2/

Pakistan is indeed pitching the idea of importing products to China. Hopefully, we can convince China and secure their investments for rail and pipeline links.

@HRK , @Clutch,
@niaz sb (I know you are not a particular fan of this, but it now seems to be attracting some official backing)