Key Takeaways
- Four Pakistani refineries have signed agreements for $4.2 billion in upgrades.
- Projects include fuel-quality improvements and capacity expansion.
- Upgrades are expected to increase refining capacity and improve fuel quality.
Four Pakistani refineries have signed agreements with the government for major brownfield upgrades worth an estimated $4.2 billion, but have yet to submit their detailed projects to Inter State Gas Systems (ISGS), the entity designated to monitor the upgrade program. The projects involve fuel-quality improvements, Bottom-of-the-Barrel conversion, capacity expansion, and other refinery upgrades.
Attock Refinery Limited, National Refinery Limited, Pakistan Refinery Limited, and Cnergyico Pakistan Limited signed the agreements on September 24. The projects are still in the feasibility study and Front End Engineering Design stages, with technical configurations, costs, financing arrangements, and engineering packages still being finalized.
The four projects have a combined estimated investment of about $4.2 billion. If Pak-Arab Refinery Company’s planned $600 million Green Fuel project is included, the total investment across five planned refinery upgrades would reach about $4.8 billion.
The upgrade program is expected to increase Pakistan’s overall crude oil refining capacity from about 450,000 barrels per day to around 550,000 barrels per day while improving fuel quality and reducing furnace-oil production.
Attock Refinery is planning a $600 million upgrade focused on fuel quality and its product mix. The project includes new naphtha treatment and reforming units and an upgrade of its Diesel Hydro-Desulphurisation unit. ARL expects the project to increase motor-spirit production by about 25 percent and bring diesel production to Euro-V standards.
Pakistan Refinery is planning an estimated $1.8 billion project to almost eliminate furnace-oil production and double its crude-processing capacity from 50,000 barrels per day to 100,000 barrels per day. The refinery is seeking Chinese financing, but the proposed arrangement requires a sovereign guarantee or a corporate guarantee from Pakistan State Oil.
National Refinery is evaluating a $300 million to $800 million hybrid Green Fuel and Bottom-of-the-Barrel project. It has started a six-month feasibility study to determine the final configuration and is considering increasing crude-processing capacity from 50,000 barrels per day to around 70,000 barrels per day.
Cnergyico Pakistan is preparing a $1.2 billion upgrade program to increase crude-processing capacity from around 156,000 barrels per day to 200,000 barrels per day. The project includes Green Fuel, Bottom-of-the-Barrel conversion, and a new Single Point Mooring facility, with work on its Euro-V/VI component already underway.
Pak-Arab Refinery Company has not yet signed the upgrade agreement but has indicated that it plans to do so before October 24. It is preparing a $600 million Green Fuel project aimed at further reducing furnace-oil production and moving the refinery from Euro-III to Euro-V gasoline and diesel.
