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Pakistan tracks Saudis on offer to avoid more China debt



ISLAMABAD-Saudi officials are expected to hold talks in Pakistan on Monday about a planned multi-billion dollar oil refinery and other investments, Pakistani officials said, as Islamabad seeks new sources of debt to avoid further Chinese debt.

Saudi Arabian Oil Co., the state-owned oil giant known as Aramco, is negotiating investment in the refinery, a person close to the Saudi side of the talks said. The refinery in the Pakistani port of Gwadar, near the strategic oil hole of the Strait of Hormuz, would produce 200,000 barrels a day, said that person. Aramco spokespersons did not respond to requests for comments.

The Saudis will also hold talks on investing in other projects, Pakistani officials said, including the giant Reko Diq copper mine, also in the western Balochistan province.

Any deal would deepen Pakistan's relations with Riyadh and bring a Saudi outpost near its main regional rival, Iran. The refinery would also strengthen Gwadar's facilities as a competitor to the nearby Iranian port of Chabahar. Gwadar is only 70 miles from the Iranian border.

The Saudi refinery would undermine all Iranian attempts to bypass US sanctions to sell oil to Pakistan. Tehran, which faces US sanctions in November, has often focused on sales to neighbors when it came under international restrictions.

Pakistan is the figurehead for Beijing's global Belt and Road infrastructure construction program known here as China Pakistan Economic Corridor, which is to hand over $ 62 billion worth of Gwadar to Chinese people At the heart of it, but the development was slow, to Beijing's frustration.

Pakistan had previously been looking to China for the refinery, with talks taking place on the issue last month, according to the Pakistani Energy Ministry. However, this would mean that more debt would be raised against China. Saudi Arabia is expected to invest the money for the refinery. Washington warned of a "debt trap" of Chinese infrastructure loans to countries who can not afford to repay it, a demand rejected by China.

In Pakistan, China and the US are arguing over China's One Belt, One Road Initiative. To understand what is at stake, it helps to take a look at why China is even in Pakistan.

The Saudi investment would boost the CPEC, which stalled on debt fears and a revaluation of Pakistan's new Imran Khan government in July. Under Mr. Khan, Pakistan has invited other countries to participate in the program, and visiting Chinese Foreign Minister Wang Yi recently said Beijing is open to it.

A Pakistani government minister said Saudi Arabia would become "the third country in the CPEC." Riyadh is a close US ally accusing Beijing of undermining its global infrastructure initiative.

Pakistan, which is struggling with a balance of payments crisis, is also seeking Saudi Arabia to supply oil to Pakistani officials at a reduced price or with deferred payment

The Saudi trip is a prelude to the visit of Crown Prince Mohammed bin Salman, who In Pakistan, within weeks, Pakistani officials became the top foreign visiting visitors after Mr. Khan was formed, Iranian Foreign Minister Javad Zarif arrived at the end of August. That would have sounded the alarm in Riyadh, said Rifaat Hussain, a professor at the National University of Science and Technology in Islamabad

. Khan was subsequently invited to Saudi Arabia, where he recently met King Salman and the Crown Prince. Riyadh said at that time that ways of improving bilateral cooperation would be discussed. Pakistan provides Saudi Arabia with several thousand troops for deployment and training missions in the Kingdom, but has refused to join the war in Yemen, where a coalition led by Saudi Arabia is fighting against Houthi rebels. Mr. Hussain said that Pakistan is trying to balance its relations with Iran with Saudi Arabia.

"Pakistan sees Saudi Arabia as a way to attract more foreign investment into CPEC," Hussain said. "Pakistan's hope is to involve Saudi Arabia and Iran."

In the past, Tehran has accused Saudi Arabia of using the Pakistani province of Balochistan to support jihadist groups attacking Iran, a charge denied by Riyadh. This week's visitors include Minister of Energy, Industry and Mineral Resources Khalid Al-Falih, who is also chairman of Aramco. He is scheduled to meet with Pakistani oil minister Ghulam Sarwar Khan, Pakistani officials said.

Oil products from any Gwadar refinery could be exported, sold in Pakistan or transported to China on the new roads being built by Pakistan in northwest China In the Xinjiang region, experts said:

The Saudi side is said to be Gwadar and visiting the Reko Diq copper mine, Pakistani officials said. Reko Diq was formed by a joint venture between the Chilean copper mine Antofagasta PLC and Toronto-based Barrick Gold Corp. which was frozen for years after the Pakistani authorities denied him a mining license in 201

1. The joint venture has since been looking for billions of dollars in damages.

Write to Saeed Shah at [email protected] and Benoit Faucon to [email protected]


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