The local Pakistan State Oil (PSO) and South Korea’s Hyundai Engineering & Construction Company have signed a memorandum of understanding for the proposed construction of an oil refinery. The estimated project cost is $800 million.

The scheme calls for the construction of a refinery at a provisional location in Badin, about 200 kilometres east of Karachi. It is planned to have an annual capacity of 4 million-4.5 million tonnes, roughly equivalent to 80,000-90,000 barrels a day (b/d), of which 30,000 b/d would be supplied from production in the Badin region. The remainder would be supplied via a new pipeline connecting Badin with PSO’s storage facilities in Karachi.

Hyundai and PSO are to hold further discussions in early December. They expect to appoint a consultant to undertake a feasibility study soon.