Pakistan’s Massive New $3.5 Billion Oil Refinery Clears CPEC Hurdle

Pakistan’s proposed $3.5 billion Falcon Oils Refinery and Storage Complex at Dhabeji in Thatta district has cleared a key institutional… Read More The post Pakistan’s Massive New $3.5 Billion Oil Refinery Clears CPEC Hurdle appeared first on ProPakistani.

Pakistan’s proposed $3.5 billion Falcon Oils Refinery and Storage Complex at Dhabeji in Thatta district has cleared a key institutional hurdle after the CPEC Secretariat endorsed the project and asked the Board of Investment to present it to the Joint Working Group on Industrial Cooperation.

The proposed complex is planned to have 4 million tonnes of crude oil and petroleum product storage capacity, along with a 50 MW captive power plant. The refinery is expected to produce Euro V-compliant fuels, which could increase Pakistan’s domestic refining capacity and reduce reliance on imported finished petroleum products.

The proposed site at Dhabeji in Sindh’s coastal industrial belt is located close to Karachi’s port facilities and crude import infrastructure. Its location is intended to support a refinery based on imported crude oil and the distribution of petroleum products in the domestic market.

For Pakistan, the project could have wider implications for energy security by adding deep conversion refining capacity and substantial petroleum storage. The facility is intended to help shift part of the country’s petroleum import requirements from finished products toward crude oil.

According to an Office Memorandum issued by the CPEC Secretariat at the Ministry of Planning, Development and Special Initiatives on August 24, 2026, Falcon Oils (Pvt.) Limited has proposed a 100,000 barrels per day deep conversion refinery, a major petroleum storage complex, and a captive power generation facility.

The memorandum, numbered CPECS/IC(14)/601/2026, supports the project’s inclusion in the China Pakistan Economic Corridor framework as a business-to-business initiative. The proposal is aligned with the second phase of CPEC and the governments’ focus on greater private sector participation in industrial cooperation.

The project has also established Chinese technical and engineering partnerships. The CPEC Secretariat said the feasibility study was prepared by Xinjiang Petroleum Engineering Design Co. Ltd., while engineering, procurement and construction arrangements have been signed with CEEC GEDI and CGGC.

Falcon Oils has said the refinery and storage complex will be developed and financed entirely by private sponsors on a fully non-recourse basis. The company said the project would require no sovereign guarantee and would involve no financial or other recourse to the Government of Pakistan.

The project is also expected to create significant employment during construction and permanent jobs in Thatta district, potentially establishing a major industrial anchor in the Dhabeji area. Falcon Oils CEO Sirhaan Ahmed Khan described the CPEC Secretariat’s endorsement as an important step toward advancing the project through the formal CPEC industrial cooperation mechanism.

If implemented, the 100,000 barrels per day refinery would add a significant new refining and storage asset to the country’s energy infrastructure and demonstrate the potential role of privately financed, non-recourse projects in the next phase of Pakistan-China economic cooperation.

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