Pakistan is expected to receive an economic package worth $8 billion from Saudi Arabia which includes investment in the port city of Gwadar under CPEC, a local news outlet reported on Thursday.
The deal was reportedly agreed on during Prime Minister Imran Khan’s recent visit to the Saudi Arab.
The project was abandoned by the UAE earlier this year after the cost ballooned exponentially.
The 80,000-acres mega oil city at Gwadar will be used to transport oil from the Gulf region to China through the Gwadar Port. This will reduce the distance to just seven days from Gwadar to the Chinese border instead of the current forty days.
The incumbent government has prioritised projects under CPEC and has also formed a committee headed by Minister for Planning and Development Khusro Bahtiar to focus on the development of Gwadar.
The cabinet committee in a meeting on Saturday decided to prioritise four special economic zones (SEZs) in Gwadar and the inclusion of social sector development and third country participation in CPEC.
Petroleum Minister Ghulam Sarwar Khan recently stated that Pakistan wants to develop Gwadar not only as an economic hub but also an oil city under CPEC.
The minister, in meeting with the Chinese ambassador last week, discussed future projects related to oil and gas exploration, petroleum transportation and processing. He took a keen interest in the Chinese offer to establish an oil refinery in Pakistan.
Saudi Arabia has shown a keen interest in CPEC primarily to relate its economy with China and take steps in achieving its Vision 2030, which aims to diversify the economy with energy mega projects to reduce oil dependency.
This would also utilise the unique location of Gwadar and become a global hub for vast economic activities. CPEC would provide the Saudis with an opportunity to participate even better in world trade traffic.
Saudi Arabia will also be able to help China have a better crude oil supply. China is one of the largest oil consumers and highly dependent due to its trade and business activities. Therefore, Pakistan and Saudi Arabia both can benefit from the exclusive trade routes under CPEC.