Saudi Minister for Petroleum and Energy Khalid Bin Abdul Aziz confirmed that his country will establish an oil refinery in Pakistan's southwestern strategic port city of Gwadar at a cost of $10 billion, local media reported on Sunday.

Axar.az reports citing Turkish media.

The agreement is likely to be signed during a proposed visit of Saudi Crown Prince Mohammed Bin Salman to Pakistan in February, daily Dawn reported.

Bin Abdul Aziz on Saturday arrived in Pakistan, where he visited Gwadar to inspect the proposed site for the oil refinery.

Pakistani Minister for Petroleum Ghulam Sarwar Khan and Minister for Marine Affairs Ali Zaidi welcomed the visiting Saudi minister at Gwadar.

Pakistani officials welcomed the Saudi proposed investment plan and termed the Saudi officials' visit a significant event, said a statement issued from the ministry of petroleum.

"Saudi Arabia will become an important partner in CPEC after establishing the oil refinery," Khan said.

In September last year, Pakistan had formally invited Saudi Arabia to join the China Pakistan Economic Corridor (CPEC) as a "third strategic partner".

Riyadh has agreed to invest in CPEC-related projects. It has already announced the financing of three CPEC projects in the northwestern Khyber Pakhtunkhwa province and Pakistan-administered Kashmir.

Part of China's Belt and Road Initiative, the mega project signed in 2014 aims to connect China's strategically important northwestern Xinxiang province to Gwadar through a network of roads, railways and pipelines to transport cargo, oil and gas.