Saudi Arabia has agreed in principle to invest in a new oil refinery in Pakistan's deep-water port of Gwadar, the South Asian nation's petroleum minister said on Thursday.

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State-owned Pakistan State Oil will partner with Saudi state oil giant Aramco on the project, Petroleum Minister Ghulam Sarwar Khan told reporters.

"They showed an interest to immediately invest in the refinery," Khan said, describing a visiting Saudi delegation.

"We sat down and held initial discussions with them and it was principally decided by both sides that it will be a government-to-government agreement."

Details of the refinery's costs and scope are to be worked out later, he added.