The local Pakistan State Oil (PSO) andHyundai Engineering & Construction Company of South Korea are soon to appoint a consultant for their joint- venture refinery project.
The two sides are to meet in February to finalise details of the scheme including the location, finance and consultancy. PSO signed a memorandum of understanding with Hyundai in November (MEED 2:12:94). They plan to review a short list of consultants for a feasibility study which will take about six months. Local and Korean consultants are expected to be included on the list.
A company will be set up to implement the scheme which will cost $700 million-800 million. PSO and Hyundai will each have a minimum 25 per cent stake. PSO will also approach financial institutions such as the Commonwealth Development Corporation (CDC) and the local National Development Finance Corporation (NDFC) as possible equity partners. Finance could also be sought from lending agencies such as the World Bank, International Finance Corporation and the Asian Development Bank (ADB).
The refinery will have an annual capacity of up to 4.5 million tonnes a year, equivalent to about 90,000 barrels a day. About a third of this will be supplied from production facilities in the Badin region. The remainder will come through a new pipeline which will connect Badin to Karachi.