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Pakistan to boost its crude oil refining capacity

2019/01/25 12:00

By Kamlesh Trivedi


The Pakistan government has directed its crude oil refineries to upgrade their technologies to meet the global standards and also to meet the oil product requirement of the energy starved South Asian nation. Last month, following a meeting of the Cabinet Committee on Energy in Pakistan, all refineries were asked to use funds, collected through various duties imposed on refinery products to upgrade their respective refineries.

The latest directive came in the wake of an oversupply of furnace oil (FO) by the refineries which eventually almost forced the majority of Pakistani refineries to shut down their operations. The Pakistan government has asked the oil refineries to upgrade technologies and also to expand storage and other related facilities. Due to their obsolete technologies Pakistani refineries produce around 30% of FO out of all their refining products.

Pakistan has seven active crude oil refineries, processing around 430,000 barrels per day (bpd) crude oil. Major refineries include Byco Refinery with around 155,000bpd capacity and Pak-Arab Refinery Co (PARCO) with 100,000bpd processing capacity. Pakistan has been also seeking help from China, Saudi Arabia and United Arab Emirates (UAE) to help set up state-of-the-art refineries with good economy of scale.

Responding to the Pakistan government’s request, a couple of months back PARCO had conducted a feasibility study for a 250,000bpd capacity refinery in Balochistan. To encourage investment in the refining sector in the Balochistan region, the Pakistan government had also offered a 20-year tax exemption for new refinery projects with over 100,000bpd capacity in the Balochistan region. Pakistan’s Prime Minister Imran Khan is currently touring the Middle East region, seeking financial support from UAE, Saudi Arabia and Qatar. Early this week, UAE and Saudi Arabia had agreed to set up new refineries in Pakistan as part of a bailout package offered to Pakistan. Both the Arab nations UAE and Saudi Arabia will set up refineries in deep water port Gwadar, under the ambitious China Pakistan Economic Corridor.  




India : Energy Desk  Kamlesh Trivedi  +91-98795-50717
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