Pakistan offers Saudi Arabia oil storage opportunities under tax-neutral policy

Pakistan and Saudi Arabia have agreed to strengthen cooperation in oil storage, refinery upgrades and energy security, with Islamabad offering Saudi companies opportunities to establish commercial oil storage facilities under a tax-neutral bonded storage policy approved by the Economic Coordination Committee.

Federal Petroleum Minister Ali Pervaiz Malik made the offer during a meeting with Saudi Ambassador Dr. Rajeh bin Tami Al-Baqmi, where the two sides discussed expanding bilateral cooperation in the minerals, petroleum and energy sectors, according to the Petroleum Division.

Malik said Pakistan had approved a tax-neutral bonded storage policy that would allow Saudi companies to establish oil storage facilities on a commercial basis.

The facilities would help Saudi Arabia diversify maritime supply routes exposed to risks associated with the Strait of Hormuz and the Bab el-Mandeb Strait, while improving access to Asian markets, he said.

Pakistan is also planning a large-scale petroleum storage and refining complex at Hub in Balochistan, which could strengthen the country's potential to become an energy corridor for the region.

The proposed complex would have facilities to accommodate very large crude carriers (VLCCs), allowing larger shipments of crude oil to be handled, Malik said.

He thanked Saudi authorities for prioritizing crude oil shipments to Pakistan through the Red Sea port of Yanbu.

What other energy cooperation did Pakistan and Saudi Arabia discuss?

The two sides also discussed the possibility of additional crude oil supplies from Saudi Aramco and dedicated liquefied petroleum gas (LPG) shipments to meet Pakistan's energy requirements.

They also explored cooperation to increase LPG supplies from Saudi Arabia during winter, when domestic gas demand typically rises.

Malik said Pakistan's refinery upgrade program offered significant opportunities for Saudi investment and partnerships. The program aims to modernize the country's refining infrastructure, improve operational efficiency and introduce Euro-V fuel standards.

The Saudi ambassador said the two countries' defense and energy cooperation framework was aimed at promoting regional peace, stability and economic development.

He said Saudi Arabia valued its longstanding relationship with Pakistan and that the kingdom would stand with the country through difficult circumstances.

The ambassador also announced the introduction of same-day processing of visa applications for Pakistani citizens, saying the measure would help promote business, cultural and people-to-people ties, according to the statement.

Separately, Malik invited Saudi Vice Minister for Mining Affairs Khalid Al-Mudaifer to attend the Pakistan Minerals Investment Forum, scheduled to be held in Islamabad on November 12 and 13.

The two countries reaffirmed their commitment to expanding investment and mutually beneficial partnerships in energy, petroleum and minerals, the statement said.