Pakistan’s long-delayed refinery modernization program is finally moving toward implementation, with five major domestic refineries preparing investments of between $4.5 billion and $5 billion in projects aimed at reducing furnace oil production, improving fuel quality and expanding refining capacity.
The developments cover Pak Arab Refinery Company (Parco), Pakistan Refinery Limited (PRL), Attock Refinery Limited (ARL), Cnergyico Pakistan Limited and National Refinery Limited (NRL). The government is now working to finalize implementation agreements with all five companies, according to a senior Petroleum Division official familiar with the process.
The agreements are expected to be signed at the same time during a high-level ceremony attended by Prime Minister Shehbaz Sharif. Under the recently amended Brownfield Refineries Upgradation Policy, the refineries now have 45 days to sign their implementation agreements, compared with the previous 60-day period, reported a national daily.
Pak Arab Refinery Company (Parco)
Parco, the country’s largest refinery, has agreed to move ahead with a $600 million green fuel project after conducting two studies to determine the most suitable modernization option. The company, jointly owned by Pakistan and the United Arab Emirates with a 60 percent and 40 percent shareholding structure, has informed the government that it plans to sign the agreement within the required timeframe.
Parco has already reduced the share of furnace oil in its output from about 20 percent to 14 percent through operational measures. The green fuel project is expected to bring that share down to between 10 percent and 11 percent during the first phase, while the second phase aims to eliminate furnace oil production entirely.
The refinery will also transition from Euro III to Euro V fuel standards, with motor gasoline production expected to rise from about 3,678 tonnes per day to 4,023 tonnes per day.
Pakistan Refinery Limited (PRL)
PRL is preparing one of the largest investments under the program, with plans to spend between $1.8 billion and $2 billion on a bottom-of-barrel project. The project is designed to eliminate furnace oil production, improve the refinery’s product mix and double crude refining capacity from 50,000 barrels per day to 100,000 barrels per day.
Attock Refinery Limited (ARL)
ARL is also ready to sign its agreement with the Petroleum Division for an approximately $600 million upgrade announced in 2023. The project includes a Continuous Catalytic Reformer, upgrades to its Diesel Hydro Desulphurising Unit, a Kerosene Hydrotreating Unit, additional storage and utilities, as well as a biofuel facility required under the amended policy.
The investment is expected to help ARL meet Euro V standards and increase motor gasoline production by about 25 percent.
Cnergyico Pakistan Limited
Cnergyico, the country’s largest private refinery, is planning a $1.2 billion investment covering green fuel production, a bottom-of-barrel project, higher refining capacity and a new Single Point Mooring facility.
The company currently has crude refining capacity of about 156,000 barrels per day and plans to increase it to approximately 200,000 barrels per day. Its three-phase plan includes work toward Euro V and Euro VI fuel standards, a bottom-of-barrel project and capacity expansion alongside the new facility for importing and exporting crude and finished petroleum products.
National Refinery Limited (NRL)
NRL is considering a hybrid green fuel and bottom-of-barrel project costing between $300 million and $800 million. The refinery has already achieved production of Euro V high-speed diesel, while it continues to assess the best configuration for upgrading motor spirit and other petroleum products.
The proposed investment is expected to significantly reduce furnace oil production, while crude refining capacity could increase from 50,000 barrels per day to 70,000 barrels per day. NRL has yet to finalize the scope of its modernization project.
