Abu Dhabi's IPIC delays Pakistan refinery plans

Reuters, Saturday January 10 2009
(Adds Fujairah refinery review, other investments)
By Stanley Carvalho
ABU DHABI, Jan 10 (Reuters) - Abu Dhabi government-owned International Petroleum Investment Company has delayed plans to set up a refinery in Pakistan and is reviewing its Fujairah refinery project, its CEO said on Saturday.
IPIC also plans to invest $70 billion over three phases in Abu Dhabi's petrochemical industry and may increase its stake in Austrian energy firm OMV and Spain's Cepsa after finalising a deal to buy 70 percent of industrial services firm MAN Ferrostaal AG, part of German group MAN.
IPIC invests in oil-related projects for the government of Abu Dhabi, the capital of the United Arab Emirates, which is the world's fifth-largest oil exporter. Its board approved last year plans to build a $5 billion refinery with a capacity of 250,000 barrels per day (bpd) in Pakistan.
"We are facing problems in Pakistan ... For any decision on the Khalifa Point refinery, we, both governments, need to sit together to take action," Khadem al-Qubaisi told reporters.
"We are delaying the project till we sort out the fundamental issues," he said, declining to elaborate.
A planned $6-7 billion refinery with capacity of 500,00 bpd in Fujairah in the UAE is also likely to be delayed, he said. "We are reviewing options. We are changing the configuration and making it smaller due to the demand-supply situation." he said.
But a 370 km (229.9 mile) crude oil pipeline from Abu Dhabi to Fujairah is on track for completion by early 2010, he said. It will carry 1.5 million bpd of crude for export from Fujairah.
The storage terminal at Fujairah will have capacity of up to 12 million barrels. "We will lease the storage facilities to Abu Dhabi National Oil Company or operate ourselves and charge ADNOC a tariff," he said.
Qubaisi said a new joint venture company Chemaweyaat, in which IPIC is a 40 percent shareholder, plans to invest at least 70 billion dollars in petrochemicals in Abu Dhabi.
"In the first phase, $20 billion will be invested and more than $50 billion will be invested in the second and third phases," he said, adding that the company is being set up.
Abu Dhabi Investment Council holds 40 percent and ADNOC holds 20 percent stakes in Chemaweyaat.
IPIC also plans to invest up to $2 billion in the Caspian Sea region in various sectors and will involve MAN Ferrostaal in these projects, he said.
IPIC's investment portfolio currently stands at between $12 to $15 billion but it is poised to increase as it seeks new and diversified investments, said Qubaisi.
"In the next five years we will continue to search for opportunities taking our portfolio to $20 billion. We are also looking for consolidation, looking to benefit from companies we have invested in," he said.
"We are in discussions to increase our stakes in OMV and Cepsa because they are adding a lot of value to IPIC," he said, adding it could be finalised in the next few weeks.