ISLAMABAD, 17 AUG (DNA) — 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.
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. — DNA
