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MEEF - Middle East Engineering Projects News & Releases

Biggest oil storage base in region

By Khalid Mustafa - The News

ISLAMABAD: The government is all set to establish an 'oil city' with an investment of $40 billion at Gwadar Port to make it the biggest crude and refined oil storage base in the region, a senior government official told The News.

For this purpose, the government has allotted 12,500 acres of land in Gwadar. It will be made available on lease at nominal rates to interested parties for setting up refineries or making investment in oil logistics and storage facilities.

The official said the project would be completed in two phases. In phase-1, a 'petrochemical city' will be set up with an initial investment of $12.5 billion. In this city, a big refinery, along with petrochemical, oil logistics and storage complexes, will be set up. In first three years, the refinery will be able to refine 10.5 million tonnes of oil annually. The capacity of this refinery will be increased to up to 21 million tonnes in seven to nine years. The official said the Chinese Petroleum Chamber would come up with $12.5 billion investment plan for the project. In addition to it, some companies from the Middle East have also shown interest to set up refineries at Gwadar Port.

Under the second phase of the plan, the capacity of refineries in the 'oil city' will be enhanced to 63 million tonnes in fifteen years," the official said. "We have allowed a Chinese company to initiate the project for power generation and water de-salination prior to initiating the construction of the 'oil city'," he added.

Reuters adds from Dubai: A consortium, including Dana Gas has signed an agreement to develop a liquefied natural gas terminal in Karachi at an estimated cost of $200 million, the UAE company said on Sunday.

A statement said Dana Gas, Single Buoy Moorings (SBM) and US-based Granada Group signed the memorandum of understanding for the LNG terminal at Port Qasim, which would have an initial capacity of 3.5 million tonnes a year.

It said the consortium was holding talks with major LNG producers, but did not name them. "Dana Gas has the objective to develop a network of LNG terminals mainly in the MENA (Middle East and North Africa) region and to tap into the LNG value chain including LNG trading activities," the statement said. It said Dana Gas signed a cooperation agreement with SBM, under which the United Arab Emirates firm would focus on LNG marketing activities and SBM on the supply and operation of LNG floating storage and regasification terminals. "The newly formed alliance will initially target LNG terminal projects in Pakistan, Lebanon and Kuwait," it said.

Pakistan, which has its own gas fields, expects to have a supply deficit as soon as 2008. Plans to import LNG and pipeline gas from Iran and Turkmenistan are based on projected gas demand growth of about 6.5 per cent a year. Industry sources in Pakistan have said they expected the LNG terminal to be completed around 2010.

Dana Gas was set up to deliver gas to utilities and industrial users in the UAE. With an agreement to import Iranian natural gas delayed, Dana Gas' second-quarter earnings came entirely from investments and financing activity. The firm said it aims to invest in the upstream gas industry in the Middle East, the transmission and distribution sector and gas-related industries such as petrochemicals.

The statement said natural gas consumption in the Middle East has been growing by an average 5.9 per cent a year in the last 10 years, driven mostly by demand for power generation due to growing populations and an industrialisation drive.


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