Saudi Arabia May Invest Billions in Pakistani Port of Gwadar

Gwadar Port, Pakistan (file image)

By The Maritime Executive 09-20-2018 04:51:12

Pakistani officials confirmed Thursday that Saudi Arabia will make heavy investments in the China Pakistan Economic Corridor (CPEC), a central pillar of China's international Belt and Road Initiative (BRI) of infrastructure projects.  

“Saudi Arabia is the first country that we have invited to become a third partner in CPEC," said Pakistani minister of information Fawad Chaudhry at a press conference in Islamabad. "Saudi Arabia is expected to bring massive direct investments to the project."

Pakistani media pegged the value of the Saudi assistance package at $8 billion, and suggested that the scope of work would include a major petroleum complex at the port of Gwadar. A high-level diplomatic delegation from Riyadh will visit Pakistan in early October to discuss details.

CPEC is a sweeping portfolio of road, rail, electrical and port investments totaling to more than $60 billion. For China, it offers a way to connect the isolated (and restive) western province of Xinjiang to the sea, without hauling goods all the way to and from eastern China. It could also offer another way for Western China to source Middle Eastern oil: offload it from tankers at Gwadar, then ship it across Pakistan by pipeline, cutting weeks off of the circuitous route used today. Pakistan's Frontier Works Organization puts the cost of laying a pipeline from Gwadar to the Chinese border at about $10 billion. 

The Chinese government and Chinese companies have so far committed $19 billion to CPEC's development, including major investments in the Chinese-operated port of Gwadar. India, Pakistan's regional rival, is concerned that China could use the seaport as a base to support the People's Liberation Army (Navy) - a scenario confirmed by Chinese defense analysts. “China needs to set up another base in Gwadar for its warships because Gwadar is now a civilian port," analyst Zhou Chenming told the South China Morning Post early this year.