BEIJING, Aug 19: Chinese private companies will soon finalise deals with their Pakistani partners to make investment in the petroleum and natural resources sector, said sources with the China Chamber of Commerce for Petroleum Industry (CCPI).

The CCPI will send a delegation to Pakistan later this year to finalise their ongoing negotiations in the energy sector. The sources told APP here on Saturday that the Chinese companies were encouraged by economic and investment policies of the present government in Pakistan and prepared to undertake joint ventures in the oil and coalmine sectors.

According to Wang Junjue, secretary-general of the CCPI, the deals vary from joint oilfield development to coalmine investment. This would be a breakthrough for private domestic oil companies on the overseas market, he added.

Nearly 30 initial agreements were signed by China's private oil companies and their Pakistani counterparts during a forum held in Islamabad in April this year. These agreements cover investment in oilfields, oil refineries, coal-fired power plants and hydropower projects.

The two sides also discussed a possible oil pipeline from Gwadar Port to China's Xinjiang and building up oil storage and refining facilities at the port. The oil pipeline proposal was made in a general cooperation agreement reached by the two governments during President Pervez Musharraf's visit to Beijing in February.

The two countries have also proposed at the forum to establish an international joint fund to support the development of energy projects by Chinese private oil companies in Pakistan.

According to the sources, the Chinese petroleum industry had indicated an interest in shifting its excess capacity to Gwadar. The CCPI and the All China Federation of Industry and Commerce (ACFIC) conveyed to Pakistani authorities during a recent visit that the Chinese petroleum industry was keen to invest in Pakistan's energy sector.

The ACFIC and the CCPI indicated that both the public and private sectors were willing to cooperate in energy projects in Pakistan. This cooperation will not be restricted to building an oil pipeline to set up an energy corridor to Gwadar, but also in shifting energy related industry to Pakistan.

The government will need to provide strong support to lay down a framework for a safe financial, investment and security environment in Balochistan to attract this investment, the sources said.

The Chinese petroleum industry sees four potentially fruitful projects. Firstly, an oil pipeline linking Gwadar to Xinjiang in China to set up an energy corridor. The economic viability of such a project is yet to be worked out. Secondly, the development of Gwadar Port Energy Zone, where the Chinese could set up an oil refinery with a capacity of 21 million tons. Thirdly, the Gwadar energy zone could accommodate other energy sector industries.

The Chinese business groups said China had excess capacity in the petroleum services industry and planned to move the excess capacity to Dubai, but now considering shifting it to Gwadar, the official added. According to their initial estimates, the Gwadar Port Energy Zone could attract investment of up to $13bn.

Fourthly, the Chinese petroleum industry also indicated an interest in oil and gas exploration projects in Pakistan, the official said. The Chinese business groups had proposed that a Pakistan-China energy and trade cooperation promotion association be established for such projects.

The association would include members from the oil and gas sector and other industries in the power sector. They had also suggested that a Pakistan-China joint investment company be set up to finance these projects, the sources added.

A senior official of the China Federation of Industry and Commerce said the Chinese companies were motivated for investment by the statements given by President Musharraf during his recent visit to Shanghai that his government would extend all possible incentives to convert Pakistan into an energy corridor for China, through Gwadar seaport and developing new rail and road networks.—APP