Pakistan Plans Fujairah Style Oil Hub in Hub with Deep-Sea Terminal

Pakistan is planning to establish an integrated petroleum logistics, storage and trading hub in Hub, Balochistan, modelled partly on the UAE’s Fujairah oil centre, Petroleum and Natural Resources Minister Ali Pervaiz Malik said.

 

The proposed Hub Oil City would bring together a deep-sea oil terminal, crude and petroleum-product pipelines, large-scale storage facilities, a refinery and bonded petroleum storage, with the aim of developing the area into a regional energy logistics and trading centre.

 

The government has engaged UK-based consultancy Technip Energy to conduct a basic feasibility study for the required infrastructure. The assessment is expected to be completed within two months, after which its recommendations will be submitted to the prime minister for consideration and approval.

 

If approved at the federal level, the petroleum and maritime affairs ministries will consult the Balochistan government regarding the proposed development, land requirements and the province’s role in the project.

 

According to the petroleum minister, the proposed complex would function as an integrated petroleum corridor, covering crude imports, refining, petroleum-product handling, storage, pipeline connectivity, domestic distribution, oil trading and re-export activities.

 

The initial development is planned on approximately 1,811 acres of government-owned land at Hub. The site had previously been allocated to Pakistan-Arab Refinery Ltd (PARCO) for a coastal refinery, but the government is now considering using the strategically located land for a broader petroleum infrastructure project.

 

A further 7,000 acres could potentially be made available for future expansion, subject to approval from the Balochistan government.

 

A key component of the proposal is an offshore Single Point Mooring (SPM) facility in deep water capable of handling very large crude carriers and other large petroleum vessels. The facility would allow tankers to transfer crude and petroleum products offshore through dedicated pipelines.

 

Under PARCO’s concept, the SPM would have dual functionality, handling crude imports while also supporting the potential export of refined petroleum products. The facility is envisaged to have an annual throughput capacity of around 15 million tonnes.

 

The offshore terminal would be linked to the mainland through two dedicated pipelines. One would transport imported crude towards Karachi Port Trust’s Keamari facilities, while the other would carry finished petroleum products towards Port Qasim and connect with the existing White Oil Pipeline network.

 

The government expects the offshore arrangement to reduce pressure on Karachi Port and Port Qasim, where navigational, draft and infrastructure limitations can restrict the handling of very large tankers. However, the project’s commercial viability would depend on factors such as cargo volumes, tanker traffic, infrastructure costs and market demand.

 

The planned Hub complex would also include a refinery with an estimated capacity of 100,000 barrels per day, along with storage facilities for around 300,000 tonnes of crude oil and 100,000 tonnes of Mogas.

 

Over time, bonded and strategic storage facilities could provide capacity of up to 1.5 million tonnes for crude and refined petroleum products. The complex could also accommodate LPG and LNG storage.

 

The storage component forms part of the government’s broader effort to revive customs-bonded petroleum storage and attract investment from Gulf countries. Companies from Kuwait, the UAE and Saudi Arabia have reportedly expressed interest in establishing bonded storage facilities for petroleum products, LPG and LNG at locations including Port Qasim, Karachi Port, Hub and Gwadar.

 

Under the bonded-storage model, petroleum companies and international commodity traders can store imported products without immediately paying applicable duties and taxes, subject to customs and regulatory requirements. The products can subsequently be supplied to the domestic market or exported where permitted.

 

The concept draws inspiration from Fujairah, which has developed into a major global centre for oil storage, bunkering and petroleum trading due to its strategic location and deep-water access.

 

Pakistan aims to replicate some of those advantages at Hub by combining an offshore petroleum gateway with extensive onshore storage, refining and pipeline infrastructure.

 

Hub’s proximity to Karachi and potential connectivity with Keamari, Port Qasim and the White Oil Pipeline system could further strengthen the proposed facility’s logistical position.

 

The project gained momentum following a recent visit by the petroleum minister to Karachi, where PARCO officials presented their concept for the Hub Oil City. The minister subsequently directed the company to undertake a basic feasibility assessment, resulting in the appointment of Technip Energy.

 

The project remains at the feasibility stage, with its final scale, cost, financing structure and implementation schedule dependent on the study and subsequent government approvals.

 

Separately, the government has commissioned Wood Mackenzie to examine the establishment of strategic petroleum reserves aimed at strengthening energy security and reducing the country’s exposure to disruptions in global oil supplies.

 

The study will assess potential locations, storage capacity, technical and safety requirements, as well as legal, regulatory, financial and institutional arrangements.

 

Authorities are also considering bonded petroleum storage facilities at Kot Addu, Machike and Faisalabad, potentially creating a wider network connecting coastal import terminals with inland storage facilities and major consumption centres.

 

Officials said Gulf-based companies have shown interest in petroleum storage projects at strategic locations including Port Qasim, Keamari, Gwadar and Hub. However, investment decisions will depend on the regulatory framework, commercial returns, land availability, supporting infrastructure and the broader investment environment.

 

If developed, the Hub complex could give Pakistan greater flexibility in importing, storing and transporting crude oil and petroleum products while opening opportunities for international trading and re-export.

 

The project could also improve the country’s ability to accommodate larger vessels and reduce pressure on existing port infrastructure. However, significant investment would be required for the SPM, subsea pipelines, refinery, storage facilities and related infrastructure.

 

The government will ultimately need to determine whether petroleum demand, storage requirements, trading opportunities and private-sector participation can generate sufficient returns to justify the investment. Environmental, marine-engineering and safety considerations will also need to be addressed as part of the feasibility assessment.