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KARACHI: Petroleum Minister Ali Pervaiz Malik, accompanied by the petroleum secretary and senior officials, held a series of meetings with major refineries in Karachi on Thursday, reviewing ongoing and proposed upgradation projects and assuring the industry of the government’s full support in achieving financial close and completing the projects.
Adil Khattak, chief executive officer of Attock Refinery Limited (ARL), told The News that during his visit to Pakistan Refinery Limited (PRL), the minister was briefed on its proposed refinery upgradation project, which is estimated to require an investment of between $1.8 billion and $2 billion.
The project is among the country’s most capital-intensive refinery modernisation initiatives and aims not only to bring petroleum products up to Euro-5 specifications but also to double the refinery’s production capacity.
He said the project can be implemented in two phases, although a final decision on its phasing had yet to be taken. The ministry assured PRL of its support in arranging financial close and facilitating the company in dealing with overseas stakeholders, where required.
The minister subsequently visited Pakistan-Arab Refinery Limited (Parco), where he held detailed discussions with the company’s management on its refinery upgradation plans and the security of the country’s energy supply chain. He also met representatives of the Attock Group, ARL and National Refinery Limited (NRL) to discuss their respective modernisation projects, Khattak said.
During the meeting, ARL management briefed the minister on its next upgradation project, which aims to bring its products in line with Euro-5 specifications and increase motor gasoline production by 25 per cent.
ARL representatives said that, despite being the country’s oldest operating refinery, the facility has become one of the most modern in the country through successive investments in upgradation over the years. They expressed confidence that the company will face no major difficulty in arranging financing for the proposed project because of its strong financial position.
ARL also urged the government to finalise the refinery upgradation agreements at the earliest. The company said it has been ready to sign the agreements for almost two years, but delays on the government’s side had held up the process.
“Despite our reservations, the company remains willing to sign the agreement as soon as the government completes the formalities,” Khattak said.According to refinery management, the petroleum minister assured them that the upgradation agreements will be signed next week, by Friday at the latest.
The refinery representatives appreciated the minister’s role in securing approval of the refinery upgradation policy and advancing work on strategic petroleum reserves, which Pakistan currently lacks.
They said the government, under the minister’s guidance, has already commissioned a study by an internationally renowned consultancy to develop recommendations for establishing and maintaining strategic petroleum reserves.
The refinery industry also welcomed the government’s decision to introduce daily petroleum product pricing, describing it as a long-standing industry demand.According to refinery representatives, the daily pricing mechanism has helped address fluctuations in product lifting. Under the previous system, oil marketing companies could increase product purchases ahead of expected price increases while reducing or delaying lifting when prices were expected to decline.
This often resulted in shortages or excess inventories and can force refineries to reduce throughput or shut down units.The new mechanism, they said, will help align product demand more closely with market conditions and provide greater stability to refinery operations.The minister also held a meeting with the Cnergyico refinery team during his engagements in Karachi.
