Saudi Arabia is set to become “an important partner of China-Pakistan Economic Corridor (CPEC)”, a Federal Minister for Petroleum Ghulam Sarwar Khan said over the weekend as Riyadh confirmed that the Gulf kingdom will build a mega refinery in Pakistan’s Deep Sea water port of Gwadar, which is being develop with funding from China.

agreement for the 10 billion U.S. dollar refinery will be signed by both the governments during Saudi Crown Prince Mohammed bin Salman’s forthcoming visit to Islamabad in February, Saudi Energy Minister Khalid al-Falih said on Saturday after leading a delegation to the site of the proposed refinery in Gwadar in Balochistan province.

wants to make Pakistan’s economic development stable through establishing an oil refinery and partnership with Pakistan in the China-Pakistan Economic Corridor, Falih, who is also chairman of the Board of Saudi Aramco said, adding that Saudi Arabia would also invest in other sectors. The two countries discussed cooperation in refining, petrochemicals, mining and renewable energy, the Saudi news agency SPA reported.

has assured its support for the BRI as the Gulf kingdom seeks to diversify its economy from a largely oil-based model through collaboration and foreign investments. China’s State Councilor and Foreign Minister Wang Yi, while hosting his Saudi counterpart Adel bin Ahmed al Jubeir in Beijing last July, called for “deeper alignment” between Beijing’s BRI and Riyadh’s “Vision 2030” development strategies.

Arabia move to invest in CPEC-related projects is likely to forge closer ties between Beijing, Islamabad, and Riyadh.
the fact remains that Saudi Arabia is now the first country to be collaborating in CPEC as a third party and is expected to bring massive direct investments to the project.  As per the plan, the oil city would be constructed on around 80,000 acres land with the purpose to refine and store imported oil for onward transportation to China using the CPEC route, besides developing the fuel supply chain for the landlocked Central Asian states. The oil refinery would take eight to 10 years to materialize but, once ready, it will revolutionize Pakistan’s energy industry.

For Saudi, Gwadar’s significance does not end with its investment in the petrochemical sector amounting to millions of barrels of oil flowing to Pakistan, China — and in East Asia to South Korea and Japan, but opens new vistas as well.

The refinery project in Gwadar, should be working on two different mega pipelines.  The first oil-and-gas pipeline must connect Saudi Arabia and the UAE to Gwadar via Oman while bypassing the volatile Strait of Hormuz to ensure an uninterrupted supply not only for Pakistan and china but for the East Asian states as well by way of massive storage reservoirs.

The second pipeline must connect Gwadar with the Xinjiang province in China. Sooner than later, Asia’s deepest port has to become an oil port to reduce the risk of accidents and conflicts from the Gulf and Strait of Hormuz to the South China Sea.
Deepwater Gwadar Port will prove to be a bigger challenge to operate on the demand from the international market forces and Balochistan needing a big team of skilled people to operate the Port and its affiliated industrial and commercial units for export and imports of goods from the Mekran Coast.

Gwadar deepwater port is capable of earning more than 10 billion US dollars a year facilitating the bulk transit trade between the landlocked countries of Central Asia, including Afghanistan, and rest of the world.

This is the way forward and we are sure that the Saudi massive investment packages will lead to more foreign investment which will help the country diversify the economy, create job opportunities for the youth and bolster exports.

Both Federal and Provincial government need to focus on the depoliticisation of CPEC and bringing it out of the shadow of its strategic orientation. Not only showcase CPEC but also to make known Pakistan’s potential in other economic, commercial areas. But this will need some serious effort.