Pakistan is working on a plan to develop an integrated oil city at Hub in Balochistan with an offshore Single Point Mooring facility, dedicated crude oil and petroleum product pipelines and large bonded storage facilities, aiming to turn the area into a major petroleum logistics and trading hub.
The proposed project is intended to increase Pakistan’s capacity to handle large crude oil and petroleum product vessels while reducing pressure on Karachi and Port Qasim, where port limitations restrict the berthing of very large ships.
The government has hired consultancy firm Technique to conduct a basic feasibility study of the proposed oil city. The study will assess the project’s technical and commercial viability and is expected to be completed within two months, after which the government will decide whether to move ahead with the next phase.
The project is planned on government land at Hub that had previously been allocated to Parco for a coastal refinery. Parco presented the oil city proposal to the petroleum minister during a recent visit to Karachi, following which the minister directed the company to conduct the initial study and develop the plan further.
Under the proposal, an offshore Single Point Mooring facility would be established in deep water to allow large crude oil tankers and vessels carrying finished petroleum products to unload their cargo without entering shallow water port facilities.
The SPM would be connected to the mainland through two dedicated pipelines. One would transport imported crude oil to KPT’s Kemari facilities, while the other would carry finished petroleum products to Port Qasim and connect with the existing White Oil Pipeline network.
The Hub oil city would also be linked to the government’s renewed customs bonded storage policy. Under the proposed system, petroleum companies and international traders could store imported products in bonded facilities without immediately paying applicable duties and taxes, subject to regulatory requirements.
Bonded petroleum storage is also being considered at other locations, including Port Qasim, Kemari, Gwadar, Kot Addu, Machike and Faisalabad. Gulf based companies have reportedly shown strong interest in developing storage facilities at several strategic locations.
Separately, Pakistan is working on a framework for Strategic Petroleum Reserves to strengthen energy security and reduce exposure to disruptions in international oil supplies. Consultancy firm Wood Mackenzie has been tasked with conducting a comprehensive study covering the technical, financial, commercial, legal and institutional requirements for establishing strategic storage facilities.
The study will also examine international and regional reserve models, possible public private partnership structures and the potential use of existing pipelines, transportation networks and import infrastructure. It will assess short, medium and long term options for expanding Pakistan’s strategic petroleum storage capacity, including potential locations and implementation models.
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