Saudi Arabia is said to be backing the development of a $9bn oil refinery near the China-owned port of Gwadar, which new Prime Minister Imran Khan wants to turn into “an oil city”. Khalid Al-Falih, Saudi Arabia’s energy minister, is expected to visit capital Islamabad “later this month” to sign a memorandum of understanding for the project.

The kingdom is said to have “agreed in principle” to set up the refinery. A delegation from Saudi Arabia, led by energy advisor Ahmad Hamid Al-Ghamidi, recently visited Pakistan, which is seeking financial assistance on the development that is expected to help it reduce imports of petroleum products.

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According to a report by local daily Dawn, Gwadar’s development will help Pakistan reduce its dependence on refined fuel imports, according to Makhdoom Khusro Bakhtiar, the country’s Minister for Planning and Development.

The Saudi delegation reportedly told the planning minister that it “would like the hosts to provide a suitable piece of land for the refinery”.

Saudi Arabia’s delegation is also said to have been offered participation in “the $2-3bn North-South Gas pipeline” and to bid on 10 petroleum exploration blocks that are “to be offered for auction soon”.

Separately, Dawn reported that Saudi Arabia “would not be made part of” the $50bn China-Pakistan Economic Corridor (CPEC) framework. CPEC includes $6bn of inter-government loans, with the remaining amount falling under the independent power producer model for energy projects.

“Saudi Arabia is not to become a collateral strategic partner in the CPEC,” Bakhtiar said. “This impression is not true.”