China, Pakistan finalizing deals in energy sector
From Saira Ilyas

BEIJING—Chinese private companies will soon finalize deals with their Pakistani partners to make investment in the energy sector, said sources in China Chamber of Commerce for Petroleum Industry (CCPI).
In this connection, the CCPI will send a delegation to Pakistan later this year to finalize their ongoing negotiation with the Pakistani side.
The sources told APP in Beijing that the Chinese companies were encouraged by economic and investment policies of Pakistan government and prepared to undertake joint ventures in the oil and coal mine sectors.
According to Wang Junjue, the secretary general of CCPI the deals vary from joint oilfield development to coalmine investment. This will be a breakthrough for private domestic oil companies on the overseas market, he added.
Nearly, 30 MoUs were signed by private oil companies of both countries during a forum held in Islamabad in late April. These MoUs cover investment in oilfields, oil refineries, coal-fired power plants and hydropower projects.
The two sides also discussed a possible oil pipeline from Gwadar Port to Xinjiang and building up oil storage and refining facilities at the port.
The oil pipeline proposal was made in a general cooperation agreement reached by the two governments during President Pervez Musharraf's official visit to Beijing in February.
The two countries also proposed at the forum to establish an international joint fund to support the development of energy projects by Chinese private oil companies in Pakistan.
According to the informed sources, the Chinese petroleum industry has indicated an interest in shifting its excess capacity to Gwadar. The CCPI and All China Federation of Industry and Commerce (ACFIC) conveyed to Pakistani authorities during a recent visit that the Chinese petroleum industry is keen to invest in Pakistan's energy sector.
The ACFIC and CCPI indicated that both the public and private sectors are willing to cooperate in energy projects in Pakistan. This cooperation will not be restricted to building oil pipeline to set up an energy corridor to Gwadar, but also in shifting energy related industry to Pakistan.
However, the government will need to provide strong support to lay down a framework for a safe financial, investment and security environment in Balochistan to attract this investment, the sources said.
The Chinese petroleum industry sees four potentially fruitful projects. Firstly, an oil pipeline linking Gwadar to Xinjiang in China to set up an energy corridor.
The economic viability of such a project is yet to be worked out. Secondly, the development of Gwadar Port Energy Zone, where the Chinese could set up an oil refinery with a capacity of 21 million tonnes.
Thirdly, the Gwadar energy zone could accommodate other energy sector industries. The Chinese business groups said that China has excess capacity in the petroleum services industry and planned to move the excess capacity to Dubai, but was now considering shifting it to Gwadar, the official added. According to their initial estimates, the Gwadar Port Energy Zone could attract investment of up to $13 billion.
Fourthly, the Chinese petroleum industry also indicated an interest in oil and gas exploration projects in Pakistan, the official said. The Chinese business groups had proposed that a Pak-China energy and trade cooperation promotion association be established for such projects.
The association would include members from the oil and gas sector and other industries in the power sector. They had also suggested that a Pak-China joint investment company be set up to finance these projects, the sources added.