Petroleum Minister Ali Pervaiz Malik backs refinery upgrades

Petroleum Division assures support to refineries in securing financing and facilitating engagement with overseas stakeholders for the proposed refinery upgradation project Federal Minister for Petroleum Ali Pervaiz Malik on Thursday held crucial meetings with the management of leading refineries, including Pakistan Refinery Limited (PRL), Pakistan-Arab Refinery Limited (PARCO), Attock Refinery Limited (ARL), National Refinery Limited (NRL) and Cnergyico, in Karachi to review ongoing and proposed upgradation projects, assuring the industry of the government's support in achieving financial close and completing the planned investments, The News reported. Accompanied by the petroleum secretary and senior officials, the minister was briefed during his visit to Pakistan Refinery Limited on the company's proposed upgradation project, which is estimated to require an investment of between $1.8 billion and $2 billion. According to Adil Khattak, chief executive officer of ARL, the project aims to upgrade PRL's petroleum products to Euro-5 specifications and double the refinery's production capacity. The project could be implemented in two phases, although a final decision on its phasing has yet to be made. The Petroleum Division assured PRL of its support in achieving financial close and facilitating engagement with overseas stakeholders where required. The minister later visited PARCO, where discussions focused on the company's refinery upgradation plans and the security of Pakistan's energy supply chain. He also held meetings with representatives of the Attock Group, ARL and NRL to discuss their respective modernisation projects. ARL management briefed the minister on its next upgradation project, which aims to bring the refinery's products in line with Euro-5 specifications and increase motor gasoline production by 25%. The company said it had undertaken successive investments over the years to modernise its facilities and expressed confidence that its financial position would enable it to arrange financing for the proposed project. ARL also urged the government to finalise refinery upgradation agreements, saying the company had been ready to sign the agreements for almost two years but the process had been delayed due to pending government formalities. Despite its reservations, the company remains willing to sign the agreement once the formalities are completed, Khattak said. According to refinery representatives, the petroleum minister assured the industry that the refinery upgradation agreements would be signed next week, by Friday at the latest. The refinery industry also welcomed the government's move towards daily petroleum product pricing, describing it as a long-standing demand. Representatives said the mechanism had helped address fluctuations in product lifting that occurred under the previous pricing system. Refinery representatives said daily pricing would help align product demand more closely with market conditions and provide greater stability to refinery operations. The industry also appreciated the minister's role in securing approval of the refinery upgradation policy and advancing work on establishing strategic petroleum reserves, which Pakistan currently lacks. According to refinery representatives, the government has commissioned a study by an international consultancy to develop recommendations for establishing and maintaining strategic petroleum reserves.