PSO, Kuwait Petroleum agree on bonded storage for fuel trade

Pakistan State Oil (PSO) and Kuwait Petroleum Corporation (KPC) have agreed to expand their five-decade energy partnership, covering fuel supplies, bonded storage and potential investments in gas, refining, shipping and logistics, PSO said Thursday. The agreement followed talks between senior officials on Pakistan's growing energy needs and changing global market conditions.

What fuel supplies will PSO and Kuwait Petroleum maintain?

The companies will maintain gasoil, commonly called diesel, and jet fuel supplies from Kuwait to Pakistan. They also intend to adjust the commercial terms of those arrangements to reflect market conditions. PSO did not announce new contract prices, shipment volumes or a timetable for any changes to take effect.

How will Kuwait Petroleum use Pakistan's bonded storage facilities?

Under the arrangement, KPC will use Pakistani storage terminals and port facilities to hold imported petroleum products for sale in the domestic market or re-export to other countries in the region.

The arrangement falls under Pakistan's revised Customs Bonded Storage Policy, which allows foreign suppliers to maintain petroleum inventories in approved bonded facilities.

The government's Economic Coordination Committee approved a proposal in August 2026 to allow petroleum imports on foreign suppliers' accounts through customs-bonded storage facilities.

However, PSO said Pakistani government departments and institutions must still complete the procedures and documentation required to implement the arrangement.

The company did not specify which facilities KPC would use, the quantities of fuel involved or when operations would begin.

What other energy investments are being considered?

PSO and KPC will examine opportunities to introduce additional Kuwaiti petroleum products to Pakistan, including motor gasoline and petrochemicals.

The companies also discussed potential supplies of base oils and cooperation in lubricant marketing.

KPC expressed interest in further strategic alliances in Pakistan, with possible investments in gas, refining, storage infrastructure, shipping and logistics.

These projects remain under consideration, with no investment amounts or finalized agreements announced.

The wider cooperation is intended to strengthen Pakistan's energy security, diversify supply arrangements and support long-term growth in the energy sector.

Who represented PSO and KPC at the meeting?

PSO Chief Executive Officer Jawwad Ahmed Cheema led the company's delegation, accompanied by Vice President Consumer Business Ghulam Murtaza Shaikh and General Manager Supply Ashar Ansar.

They met KPC Chief Executive Officer and Deputy Chairman Shaikh Nawaf Saud Al-Sabah and Managing Director International Marketing Shaikh Khaled Ahmad Al-Sabah, who also serves as CEO of Kuwait Oil Tanker Company.

PSO said it had invited KPC's senior management to Pakistan in early 2027 as part of celebrations marking their five-decade partnership.