- September 3, 2026
- Posted by: Tresmark
- Category:
The government has launched preliminary work on a plan to establish an integrated oil city at Hub, Balochistan, featuring an offshore Single Point Mooring (SPM), dedicated crude and petroleum product pipelines, and large-scale bonded storage facilities.
The proposed project is aimed at strengthening Pakistan’s petroleum logistics infrastructure and easing congestion at Karachi Port and Port Qasim, where existing facilities face limitations in handling very large oil tankers.
According to official sources, consultancy firm Technique has been engaged to conduct a basic feasibility study to assess the technical and commercial viability of the proposed oil city. The study is expected to be completed within two months, after which the government will determine whether to proceed with the project.
The oil city is planned on government-owned land at Hub that had previously been allocated to Pakistan Refinery? No—PARCO for a coastal refinery project. The government now intends to utilise the strategically located land for a wider petroleum infrastructure complex covering import handling, storage, pipeline connectivity and product distribution.
During a recent visit to Karachi, the petroleum minister was briefed by PARCO management on the proposal. The company presented a concept paper, following which the minister instructed PARCO to undertake the initial feasibility work and further develop the plan.
Under the proposed design, an offshore SPM would be installed in deep water, enabling large crude and petroleum product vessels to unload cargo without entering shallow-water port facilities.
The SPM would be connected to the mainland through two dedicated pipelines. One would transport imported crude towards KPT’s Kemari facilities, while the second would move finished petroleum products towards Port Qasim and connect with the existing White Oil Pipeline network.
The proposed Hub facility would also support the government’s renewed customs-bonded storage policy. Under the framework, petroleum companies and international traders could store imported products in bonded facilities without immediately paying applicable duties and taxes, subject to regulatory requirements.
Officials said bonded storage facilities are planned for Hub, while Gulf-based companies have also shown interest in developing petroleum storage infrastructure at Port Qasim, Kemari, Gwadar and Hub. Additional bonded petroleum storage facilities have been proposed at Kot Addu, Machike and Faisalabad, potentially creating a broader inland and coastal storage network.
Meanwhile, Pakistan is separately working on a framework for establishing Strategic Petroleum Reserves (SPR) to improve energy security and reduce exposure to disruptions in international oil supplies.
Consultancy firm Wood Mackenzie has been assigned a comprehensive study covering the technical feasibility, safety, integrity and operational requirements of potential strategic storage facilities. The study will also examine international and regional reserve models and Pakistan’s policy, regulatory and institutional requirements.
The consultancy will evaluate short-, medium- and long-term options for expanding strategic petroleum storage, including the appropriate capacity, locations and implementation structure. It will also assess legal, financial, commercial and institutional arrangements, including potential public-private partnership models.
Wood Mackenzie will further examine whether existing pipelines, transportation networks, import routes and other petroleum infrastructure can be integrated into the proposed strategic reserve system.
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