Pakistan’s Five Refineries Set for $6 Billion Upgrade Push

Pakistan's five major oil refineries are set to sign upgrade agreements worth up to $6 billion, as reported by Business Recorder. The refineries, which include Pak Arab Refinery Limited, Pakistan Refinery Limited, National Refinery Limited, Cnergyico, and Attock Refinery Limited, have met with Federal Minister for Petroleum Ali Pervaiz Malik to discuss the Refinery Upgradation Policy.

The upgrades will enable the refineries to produce Euro-5 compliant fuels with ultralow sulfur content, a standard in many Western countries, helping Pakistan decrease its fuel imports. The minister emphasized that upgrading Pakistan's refining capacity is vital for improving the quality of domestic petroleum products, strengthening domestic supply resilience, reducing dependence on imported petrol and diesel, and advancing the country's energy security objectives.

With the Iran war disrupting oil and fuel supplies from the Middle East, Pakistan has been paying high premiums for fuel imports, seeking alternative crude oil sources, and paying the highest prices for LNG cargoes since 2022, when global spot prices surged due to the Russian invasion of Ukraine and reduced pipeline gas supply from Russia to Europe.

Pakistan's refiners have been exploring potential crude oil supplies from the U.S., Nigeria, and Central Asia amidst the Middle East crisis threatening both the Strait of Hormuz and Red Sea supplies. Additionally, Pakistan's National Oil and Gas Development Company Limited OGDC recently signed an agreement with a Canadian firm to employ advanced technology to increase production from heavy crude oilfields, aiming to boost domestic crude supply.