China calls halt to Gwadar refinery

Cash-strapped Pakistan, which has had to accept more than US$11 billion from the International Monetary Fund, is threatened with the loss of a huge foreign investment after China said it had shelved its multi-billion dollar coastal oil refinery project at Gwadar, in southwest Balochistan province.

China has formally informed the Pakistani authorities that the refinery project has been deleted from the list of financial development plans agreed with Islamabad for the financial year ending next June as there has been no progress on the project, according to a Business Recorder report.
The decision, which follows suspension in January by the

United Arab Emirates state-run International Petroleum Investment Company (IPIC) of work on the $5 billion Khalifa Coastal Refinery (KCR) project at Hub, also in Balochistan, creates uncertainty about the future of the planned $12.5 billion mega oil city project in Gwadar, of which the refinery there was to be a key element.

It also casts doubt over plans for a corridor carrying energy pipelines and refinery products the length of Pakistan from Gwadar onto western China.

The global recession was a factor in forcing the Chinese and UAE governments to shelve their refinery projects, the Business Recorder report said, citing sources in Pakistan’s Petroleum Ministry. Local analysts, however, believe that security concerns were also an important factor.

The province has battled with a low-level insurgency for the past five years. Most recently, a security forces’ checkpoint was attacked on Wednesday in Quetta, Balochistan’s capital, killing four people and injuring five others.

Asia Times