Pakistan plans integrated oil city at Hub with offshore SPM and bonded storage

The federal government has begun work on an ambitious plan to establish an integrated oil city at Hub in Balochistan,

ISLAMABAD, September 3, 2026: The federal government has begun work on an ambitious plan to establish an integrated oil city at Hub in Balochistan, featuring an offshore Single Point Mooring (SPM) facility, dedicated oil pipelines and extensive   facilities. The proposed project is aimed at turning Hub into a major centre for petroleum imports, storage, transportation and trading.

The initiative is expected to increase Pakistan’s ability to handle large crude oil and petroleum product vessels while reducing the burden on existing port facilities in Karachi and Port Qasim. Current infrastructure at these ports has limitations, particularly when it comes to accommodating very large tankers because of restrictions related to water depth and berthing capacity.

According to official sources, consultancy firm Technique has been engaged to carry out a basic feasibility study for the proposed oil city. The study will examine the technical and commercial viability of the project and determine whether the required infrastructure can be developed successfully. The assessment is expected to be completed within two months, following which the government will decide on the project’s next stage.

The proposed oil city is planned on government-owned land at Hub that had previously been allocated to Pakistan Arab Refinery Limited (PARCO) for the development of a coastal refinery. The government now intends to make more effective use of the strategically located land by developing a wider petroleum infrastructure project. The facility could combine oil imports, storage, pipeline transportation and distribution operations in one location.

During a recent visit to Karachi, the petroleum minister was briefed by PARCO officials about the proposed development. The company presented its concept for the oil city, after which the minister directed PARCO to conduct the initial feasibility assessment and further refine the proposal.

Under the plan, an offshore SPM would be installed in deep water to allow large crude carriers and petroleum product vessels to unload their cargo without entering shallow-water port areas. The offshore facility would be connected to the mainland through two dedicated pipelines.

The first pipeline would transport imported crude oil to the Karachi Port Trust’s (KPT) Keamari facilities, while the second would transport refined petroleum products towards Port Qasim and connect with the existing White Oil Pipeline network. This infrastructure could improve the efficiency and flexibility of Pakistan’s petroleum supply chain.

The oil city is also expected to support the government’s renewed customs-bonded storage policy. Under this system, petroleum companies and international traders could store imported products in bonded facilities without immediately paying applicable duties and taxes, subject to government regulations.

Bonded storage facilities are planned for Hub, while Gulf-based companies have reportedly shown interest in establishing petroleum storage infrastructure at Port Qasim, Keamari, Gwadar and Hub. Additional bonded storage facilities have also been proposed at Kot Addu, Machike and Faisalabad.

Meanwhile, Pakistan is working on a framework for Strategic Petroleum Reserves (SPR) to improve energy security and protect the country against disruptions in global oil supplies. Consultancy firm Wood Mackenzie has been tasked with conducting a detailed study covering the technical, financial, legal and operational aspects of the proposed reserves.

The study will examine potential storage locations, capacity requirements, financing options and international models. It will also assess the possibility of using existing pipelines, transportation systems and import infrastructure. Public-private partnership models may also be considered for developing and operating Pakistan’s strategic petroleum reserves.