Pakistan has approved a tax-neutral bonded framework that allows Saudi companies to hold commercial oil reserves in the country without incurring local tax liabilities. The move seeks to attract foreign investment while offering Saudi Arabia more options for managing its supplies and reaching Asian markets.
Storage policy offers greater route flexibility
Petroleum Minister Ali Pervaiz Malik outlined the framework during talks with Saudi Arabia’s new ambassador to Pakistan, Dr Rajeh bin Tami Al-Baqami. He said the policy had been developed with reference to international energy hubs, including Fujairah and Singapore.
According to the meeting statement, commercial reserves in Pakistan could help Saudi companies diversify maritime transit risks involving the Strait of Hormuz and Bab Al Mandeb Strait. Malik said storage facilities would also give the kingdom greater flexibility in supplying regional markets.
The discussions covered several areas of potential cooperation:
- Strategic oil storage.
- Upgrades to refineries.
- Supplies of liquefied petroleum gas.
- Support for commercial engagement.
- Investment in mining, petroleum and energy.
Hub complex and refinery investment
Malik also presented plans for a large petroleum storage and refining complex at Hub in Balochistan, being developed under the guidance of Technip Energies UK. The proposed complex would be able to accommodate Very Large Crude Carriers.
He said the project could strengthen Pakistan’s role as an energy corridor for markets in Central Asia and China. Separately, he encouraged Saudi participation in the country’s ongoing refinery modernisation programme.
That programme aims to update domestic refining facilities, improve operating efficiency and move towards Euro 5 fuel standards. Malik described it as an opportunity for Saudi investment in Pakistan’s refining industry.
Crude cargoes and winter supplies
The minister thanked Saudi authorities at Yanbu port for giving priority to crude shipments bound for Pakistan during recent disruptions in global markets. He also discussed coordination with Saudi Aramco over possible increases in crude cargo purchases and dedicated liquefied petroleum gas shipments.
Those discussions addressed Pakistan’s energy needs, including an expected rise in domestic gas demand during winter.
Visa processing and minerals forum
The Saudi ambassador announced that the kingdom’s embassy in Islamabad had introduced same-day processing for visa applications from Pakistani citizens. The measure is intended to ease travel and support business, cultural and personal exchanges.
Malik also invited Saudi Vice Minister of Mining Khalid al-Mudafier to the Pakistan Minerals Investment Forum in Islamabad on November 12 and 13. He highlighted the minerals sector as another area for investment and bilateral cooperation.
