ISLAMABAD -  The Khyber Pakhtunkhwa government has fixed Rs2,000 per marla rate for the acquisition of 400 acres of land for the oil refinery, to be established by the FWO, at Karak, it is learnt reliably here on Sunday.

All the pre-requisite for the acquisition of land have been finalised and payments to the landowners will start within couple of weeks, official sources told The Nation. The district administration of Karak has imposed section 4 in Neshpa area of district Karak and soon the purchase of land will be started. The district administration has fixed the rate at Rs2,000 per marla, the source said.

The construction of oil refinery was part of the four agreement signed between the KP government and FWO in May 2017. The agreements valued $10.86 billion included Peshawar Model City Township and Khyber Pakhtunkhwa China Investment Plan (KPCIP)-M1 City Nowshera, three hydropower plants in Chitral, one cement plant in Haripur and one Oil Refinery at Karak.

According to the agreement, FWO would construct an oil refinery worth $600 million at Neshpa District Karak that will produce 40,000 barrels per day. With Rs4,00,000 per kanal around 3,200 kanal will cost around Rs140 to Rs150 million, the source maintained. When asked why such a huge land is being acquired for just one refinery, the official said that there will other business activities as well. About the fixing such a low price for the land, the source said that it is desert that’s why the price is low.

It is pertinent to mention here that KP has already signed MOUs with Chinese and Russian companies for the establishment of oil refineries in the province. When asked do you think that oil reserve in the province is enough to meet the demand of three refineries, the source said yes the provinces has enough underground oil and gas reserves which could easily cater for the future demand of the refineries.

KP producing about 53,000 barrels of oil per day which is more than 50 percent of the total oil production of the country. Due to the unavailability of the oil refinery in KP the crude oil is being transported to the refineries in Attock or Karachi. Besides creating employment opportunities for the people of the impoverished southern districts of KP, the refinery would help improve the overall availability of POL products across the country as well as help in saving sizeable foreign exchange, the source maintained. According to one estimate, Khyber Pakhtunkhwa has Natural Gas recoverable reserves of some 9 Trillion Cubic Feet and Oil reserves exceeding 500 million barrels.

According to details, earlier the KP government was failed to develop consensus on the site for the construction of oil refinery. The land for the construction of the oil refinery was shortlisted but due to political backlash the KP government was unable to give final verdict about the refinery final site. Different perspective sites were shortlisted for the proposed refinery, including Khushal Garh and Shakardara in Kohat and Karappa in Karak. It was very hard to decide the site for the refinery because the issue was politicised and MNAs and MPAs from the ruling PTI from Karak and Kohat districts wanted to establish the refinery in their respective districts.

According to the point of view of the people of Karak, since the oil wells are located in Karak therefore refinery should be constructed in Karappa area of the district. According to their view, Karappa is the most suitable location for the refinery as it is located only 10 kilometres away from the main gas and oil fields of Nashpa-Karak and thus an oil supply line would be easier to build. On the other hand, two PTI lawmakers from Kohat were lobbying to make the refinery built in their constituency at Khushal Garh. The Kohatian were of the view that due water scarcity in Karak district the refinery will face water supply problem. However, now it has been decided that one refinery will be established at Karak, by FWO, while one be established in Kohat by Russians, the source maintained.