With the Pakistan-Tehreek-Insaf government taking command in 2018, the country is all set to undergo changes in accordance with the policies of Prime Minister Imran Khan. Consequentially, this transfer of power has also given way to several speculations regarding the colossal China Pakistan Economic Corridor projects. However, recently, the Prime Minister as shed light on his plan of action regarding the enterprise.
Prime Minister’s Plan of Action
This plan includes the development of an Oil City in Gwadar. So far, Khan has been successful in augmenting the FDI influx in Pakistan through Saudi Arabia, while China stands rock solid on its former position as the guardian and overseer of the project.
Oil City: What It Holds
80,000 thousand acres of land has been acquired in Gwadar for the construction and development of an oil refinery plant, a petrochemical industry, and storage units within the Oil City. While an investment of $8 billion has been proposed by the Saudi government upon the invitation of Prime Minister Imran Khan to facilitate the establishment. The Oil City will be purpose built and therefore specifically designed for the storage as well refinery of oil.
How Does The Development Of Oil City Benefit Pakistan?
Saudi involvement can provide potential relief to the heavily indebted Pakistan. Expansion of the Gwadar based CPEC projects presupposes potential economic independence for Pakistan minimising its dependence on refined oil and petroleum product imports. On the contingency that such oil refineries are built and made functional, Pakistan will be able to import cheaper crude oil in lieu of more expensive refined oil, inevitably reducing its import bill.
What Will Saudi Arabia Gain?
With a monitored, protected and direct link with China, Saudi Arabia will be enable to aggrandize the supply of crude oil exported to China; it being one of the largest oil importers in world will have direct access to the land of oil reserves which in turn will benefit the Saudi economy.
Is China Also At Advantage From The Third Party Involvement In CPEC?
China has been a primary beneficiary in the CPEC projects. Similarly, Saudi investment and involvement in the CPEC is not detrimental to China’s economic health. The construction of a Saudi-facilitated Oil City in Gwadar also plays in China’s favour. Not only will it be able to import oil more conveniently it will do so in lesser time than before.
Importing oil directly to Shanghai takes approximately 40 days. However, if Pakistan acts as an intermediate storage place for Chinese oil imports the transportation time will considerably be reduced to 7 days.
Saudi involvement, both monetary and political emanates a better picture of CPEC globe-wide. It serves as a step forward in attempts towards regional integration while also silencing countries who had nothing to offer except scepticism, criticism and doubts upon the grand endeavour.