Abu Dhabi IPIC To Go Ahead With $5B Pakistan Refinery-Source
Abu Dhabi fund International Petroleum Investment Co., or IPIC, will go ahead with plans to build a $5 billion refinery in Pakistan after overcoming differences with its joint-venture partner, Pak-Arab Refinery Co., a person familiar with the matter said.
“The issues are resolved and the project is being reactivated,” the person, who declined to be named, told Zawya Dow Jones.
IPIC, which manages energy investments in excess of $14 billion for the Abu Dhabi government, is now preparing to award the project management contract, or PMC, on the refinery, the person said.
In January, IPIC’s chief executive Khadem Al Qubaisi said plans for the refinery were delayed as the company was “facing some problems and issues in Pakistan.” He didn’t elaborate at the time. The global economic downturn was one factor contributing to the delay, the person said.
IPIC didn’t respond to questions about the project emailed by Zawya Dow Jones Tuesday.
IPIC’s board in 2008 approved building the 250,000-barrel-a-day Khalifa Coastal Refinery, or KRC, project in Baluchistan with Parco to help the country meet rising domestic demand for refined products.
IPIC will hold a 74% stake in the project, with Parco to hold the remainder. Parco is a 60:40 joint venture between Pakistan’s government and Abu Dhabi Petroleum Investment Holdings, which in turn is 75% owned by IPIC.
The award of the PMC contract will depend on a review of bidders’ revised price proposals, which should reflect today’s lower cost environment, the person said.
International consultancy firms including WorleyParsons Ltd. (WOR.AU), Shaw Group (SHAW) and Veco Engineering, submitted bids for the PMC contract last year but the award was put on hold amid the delays.
If revised prices meet IPIC’s expectations, an award may happen as early as October. Otherwise, another option would be to retender the contract to secure better prices, the person added.
IPIC also continues to work on plans to build a refinery in Morocco, the person said.
