ISLAMABAD, Oct 10: The government approved on Wednesday construction of the Coastal Refinery Project costing $5 billion at Khalifa Point in Hub area of Balochistan.
It also decided to advise the Oil and Gas Development Corporation to allocate and dedicate at least 80 per cent of the Liquefied Petroleum Gas (LPG) produced from Chanda filed for distribution in the Federally Administered Tribal Areas (Fata).
These decisions were taken at a meeting of the Economic Coordination Committee (ECC) of the Cabinet held here on Wednesday with Prime Minister Shaukat Aziz in the chair.
Briefing newsmen, Adviser to the Finance Ministry Dr. Ashfaq Hassan Khan said the refinery would be established as a joint venture by the Abu Dhabi-based International Petroleum Investment Company (IPIC) and Pak-Arab Refinery Company (Parco) with equity participation of 74 and 26 per cent, respectively. The project would be completed and commissioned by the first quarter of 2011.The Ministry of Petroleum and Natural Resources had been allowed to sign the implementation agreement with IPIC within a month, he added.
Mr Khan said that the project with a refining capacity of 200,000 to 300,000 barrels per day would cost $4-5 billion and the preliminary work had already been started.
He said that various concessions, including a 20-year tax holiday, exemption from five per cent workers’ profit participation and exemption from 0.5 per cent services charges under the export processing zones rules, had been announced for the project.
“These initiatives would be applicable for all the refineries and petrochemical projects to be installed along the coastal belt of Balochistan, particularly Gwadar,” he added.
Answering a question, the adviser said that the products manufactured by the refinery would be exported as well as sold in the local market.
The ECC also approved reduction of duty on the import of bitumen from 15 per cent to 5 per cent, he said.
Mr Khan said that a summary for the provision of LPG to Fata had also been approved. He said that the Oil and Gas Regulatory Authority would ensure that the LPG dedicated from Chanda field was marketed in these areas.
The finance ministry adviser said that the meeting reviewed flour prices and expressed satisfaction over its availability in the market. He ruled out any increase in flour prices the days ahead. He said as of October 7 the wheat stock stood at 3.79 million tonnes.
He said that the foreign exchange reserves reached the highest ever $16.34 billion.
Mr Khan said that the sales of utility stores recorded a three-time increase during Ramazan as compared to the previous month. He said that the number of utility stores outlets would reach 6,000 by the end of 2007.
