Hormuz crisis triggers oil reserves plan

The minister highlighted that the government is pursuing reforms to advance Pakistan's energy security, recognising that energy security is intrinsically linked to national security. He said ensuring resilience of energy supplies and reducing vulnerabilities to external shocks is a key priority of the incumbent government.

He said the recent Strait of Hormuz crisis had further magnified the need to strengthen buffers and build greater resilience against supply disruptions. The SPR initiative is therefore an important step towards assessing how the country can strengthen its preparedness for potential supply shocks.

The Economic Coordination Committee (ECC) has already approved a world-class bonded scheme for large international oil players. Malik said the purpose of commissioning the study was to enable the government to make an informed and evidence-based decision before embarking on such a major strategic initiative.

He emphasised that the study should provide a pragmatic and implementable solution suited to Pakistan's requirements and help determine the most appropriate way forward, including the possibility of pursuing SPR development in a phased manner.

The Wood Mackenzie team said this is the right time for Pakistan to work on energy security, particularly in view of the evolving global energy landscape and recent supply disruptions. The team said the study would focus on developing a pragmatic solution based on Pakistan's specific requirements.

The study will cover technical feasibility, integrity, safety and operational assessment of proposed strategic storage facilities; international and regional benchmarks; policy and regulatory requirements; and short-, medium- and long-term implementation options. It will also examine legal, regulatory, financial, commercial and institutional arrangements, including possible public-private partnership models.

The study will further assess existing infrastructure that could be utilised for strategic storage, taking into account connectivity and logistics requirements, and will provide estimates of capital expenditure, financing options, implementation timelines and institutional responsibilities for phased development of SPR capacity.

Malik directed all relevant stakeholders to extend full cooperation to Wood Mackenzie and ensure timely provision of required data so that the study can be completed within agreed timelines. A steering committee will be formed to periodically review progress.

From Wood Mackenzie, Christopher Darry, Vice President; Chris Brown, Director; Jordan Macdonald; and Aamir Malik, Senior Vice President, attended the meeting. Representatives of Attock Refinery Limited (ARL), Pakistan Institute of Development Economics (PIDE), Government Holdings (Private) Limited (GHPL), the Ministry of Maritime Affairs and Pakistan LNG Limited (PLL) were also present.