- Refineries plan investment in green fuel, other projects.
- Govt finalising upgradation deals for local refineries: official.
- Agreements likely to be signed at high-level ceremony.
ISLAMABAD: Pakistan’s refinery modernisation drive is finally gaining momentum, as five domestic refineries plan to invest $4.5 billion to $5 billion in green fuel, bottom of barrel, capacity expansion and related projects.
In a major breakthrough, Pak-Arab Refinery Company (Parco), the country’s largest refinery, has agreed to proceed with a $600 million green fuel project after taking considerable time to determine the scope and nature of its upgradation, according to The News.
Parco, a joint venture between Pakistan and the United Arab Emirates with a 60:40 shareholding structure, had commissioned two studies to assess the most suitable upgrade option. The management has informed the government that it will sign the upgradation agreement within the stipulated timeframe.
A senior Petroleum Division official, privy to the development, told The News that the government is finalising the agreements for all local refineries, which are expected to be signed simultaneously at a high-level ceremony in the presence of Prime Minister Shehbaz Sharif.
Under the recently amended Brownfield Refineries Upgradation Policy, refineries are required to sign implementation agreements within 45 days, compared with the earlier 60-day deadline.
According to the official, Parco has already brought down its furnace oil share from around 20% to 14% through various operational initiatives. With implementation of the green fuel project, furnace oil production is expected to decline further to 10% to 11% in the first phase, while the second phase envisages eventually eliminating furnace oil production altogether.
The official said Parco had opted for the green fuel project rather than a standalone bottom of barrel project.
Under the approved refinery policy, Parco will have to shift completely to Euro-V specifications from its current Euro-III. Its motor gasoline production is projected to increase from around 3,678 tonnes per day to 4,023 tonnes per day while diesel production is also expected to rise.
Meanwhile, Pakistan Refinery Limited (PRL) has opted for one of the most ambitious upgrade projects among the domestic refineries. The company plans to invest between $1.8 billion and $2 billion in a bottom of barrel project that is expected to eliminate furnace oil production and substantially improve the refinery’s product mix.
The project will also double PRL’s crude refining capacity from 50,000 barrels per day (bpd) to 100,000 bpd.
Attock Refinery Limited (ARL) has also confirmed its readiness to sign its upgradation agreement with the Petroleum Division. The ARL MD said the refinery remained committed to the project announced in 2023 under the original Brownfield Refineries Upgradation Policy.
The approximately $600 million project includes a Continuous Catalytic Reformer (CCR), revamp of the Diesel Hydro Desulphurising Unit (DHDS), a Kerosene Hydrotreating Unit, associated tankage and utilities, as well as a biofuel facility required under the amended policy.
The project will enable ARL to meet Euro-V specifications and increase motor gasoline production by around 25%.
Cnergyico Pakistan Limited (CPL), the country’s largest private refinery, is also preparing a $1.2 billion investment programme covering green fuel, bottom of barrel, capacity expansion and a new Single Point Mooring (SPM) facility. The CPL currently has crude refining capacity of around 156,000 BPD and plans to increase it to approximately 200,000 BPD. The company’s plan consists of three phases.
The first phase focuses on achieving Euro-V/VI petroleum products, with work already underway. The second phase involves the bottom of barrel project, for which studies are in progress, while the third phase covers capacity enhancement and installation of the SPM facility for import and export of crude and finished petroleum products.
Under the government’s refinery policy, CPL is projected to increase gasoline production to around 6,500 tonnes per day and diesel production to nearly 11,000 tonnes per day, while sharply reducing furnace oil output.
National Refinery Limited (NRL) is considering a hybrid green fuel and bottom of barrel project estimated to cost between $300 million and $800 million.
The NRL management said the refinery had already achieved production of Euro-V high-speed diesel, while work was continuing to determine the most appropriate upgrade configuration for motor spirit and other finished petroleum products.
The proposed hybrid project is expected to substantially reduce furnace oil production. NRL also plans to increase its crude refining capacity from 50,000 bpd to 70,000 bpd. The refinery’s final decision on the scope and configuration of the upgrade project is still being worked out.
Taken together, the proposed investments by Parco, PRL, CPL, ARL and NRL represent a potential $4.5 billion to $5 billion transformation of Pakistan’s refining industry.
The amended Brownfield Refineries Upgradation Policy has now put the refineries under a tighter deadline to move from commitments to signed implementation agreements.
