Pakistan is encouraging oil producers from the Persian Gulf to set up crude reserve buffers at a planned Energy City near one of its ports, The Express Tribune reported on Friday.
“In case of emergencies like the breakout of war, Pakistan will have the first right to utilise the oil reserves,” a Pakistani official told the publication.
Pakistan, which doesn’t have crude reserves at present to act as a buffer in case of emergencies, has been reeling from the Middle East crisis and negotiating with Iran to secure the passage of cargoes through the Strait of Hormuz.
Pakistan plans to set up a so-called Energy City at the Gwadar Port, and Kuwait has already expressed interest in building up crude reserves there, according to The Express Tribune.
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Pakistan “plans to set up an Energy City where strategic oil reserves will be built along with establishing LNG and LPG terminals,” the official told the outlet.
Pakistan’s Federal Minister for Maritime Affairs, Muhammad Junaid Anwar Chaudhry, has asked Kuwaiti officials to explore crude, LPG, and LNG storage sites with the potential creation of rental-based bonded storage facilities, which could support regional trade flows and improve the supply-chain efficiency of energy trade.
Pakistan – which has been mediating U.S.-Iran talks in recent weeks – has been negotiating to have Qatari LNG moved out of the Persian Gulf for the first time since the war began.
Pakistan has relied on Qatar’s term LNG supply for years, but the war in the Middle East and the closure of the Strait of Hormuz have led to the shutdown of Qatari LNG production and exports.
Without Qatar’s LNG, Pakistan has been reeling from an intensifying energy crisis with power outages and fuel rationing.
Thanks to a bilateral Pakistan-Iran agreement, two vessels carrying Qatari LNG are now en route to Pakistan after successfully passing through the Strait of Hormuz in recent days.
By Charles Kennedy for Oilprice.com
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