Government hires Wood Mackenzie to assess strategic petroleum reserves, including infrastructure, financing, costs and public-private partnership models.
ISLAMABAD: Federal Minister for Petroleum Ali Pervaiz Malik has chaired a kick-off meeting for a feasibility study on establishing Strategic Petroleum Reserves (SPR) in Pakistan, as the government moves to strengthen energy security and protect the country against potential supply disruptions.
International energy consultancy Wood Mackenzie has been selected to conduct the study following a competitive tender process that attracted four bids, according to an official news release.
The meeting reviewed the scope and objectives of the assignment and agreed on its overall structure and implementation timelines.
Government links energy security with national security
Ali Pervaiz Malik said the government was pursuing reforms and initiatives aimed at strengthening Pakistan’s energy security, stressing that reliable energy supplies were closely linked to national security.
He said improving the resilience of energy supplies and reducing the country’s exposure to external shocks remained key priorities for the government.
The minister said the recent Strait of Hormuz crisis had further highlighted the need for stronger buffers against disruptions to international energy supplies.
The proposed Strategic Petroleum Reserves initiative will therefore assess how Pakistan can improve its preparedness for potential supply shocks.
The Economic Coordination Committee (ECC) has already approved a bonded scheme for major international oil companies, the minister said.
Study to guide evidence-based SPR decision
Ali Pervaiz Malik said commissioning the feasibility study would allow the government to make an informed and evidence-based decision before committing to the major strategic initiative.
He directed that the study should produce a practical and implementable model tailored to Pakistan’s requirements.
The study will also assess whether strategic petroleum reserves should be developed in phases, allowing the government to determine the most appropriate approach based on the country’s requirements and available resources.
The Wood Mackenzie team said Pakistan was undertaking the study at an appropriate time given changes in the global energy landscape and recent supply disruptions.
The consultancy said it would develop a practical solution based on Pakistan’s specific circumstances and energy security requirements.
Study to assess infrastructure, costs and financing
The feasibility study will cover the technical feasibility, integrity, safety and operational requirements of potential strategic storage facilities.
It will also examine international and regional benchmarks, policy and regulatory requirements, and possible short-, medium- and long-term implementation options.
The assignment will assess the legal, regulatory, financial, commercial and institutional arrangements required for establishing SPR capacity.
Potential public-private partnership (PPP) models will also be examined as part of the study.
Wood Mackenzie will assess existing infrastructure that could potentially be used for strategic petroleum storage, while considering connectivity and logistics requirements.
The consultancy will also estimate capital expenditure, identify potential financing options, assess implementation timelines and recommend institutional responsibilities for the phased development of strategic petroleum reserve capacity.
Steering committee to monitor progress
The petroleum minister directed all relevant stakeholders to provide full cooperation to Wood Mackenzie and ensure the timely sharing of data and technical information.
He said the study should be completed within the agreed timelines and provide a sound basis for future government policy decisions.
A steering committee will also be constituted to periodically review progress on the feasibility study.
Representatives of Wood Mackenzie attending the meeting included Vice President Christopher Darry, Director Chris Brown, Jordan Macdonald and Senior Vice President Aamir Malik.
Representatives from Attock Refinery Limited (ARL), the Pakistan Institute of Development Economics (PIDE), Government Holdings (Private) Limited (GHPL), the Ministry of Maritime Affairs and Pakistan LNG Limited (PLL) also participated in the meeting.
The feasibility study marks an initial step towards determining whether Pakistan should establish strategic petroleum reserves and, if so, how such reserves could be developed and integrated into the country’s wider energy security framework.