Refineries Still Finalizing Feasibility Studies After Signing $4.2 Billion Upgrade Deals

Four Pakistani refineries have inked agreements with the government for major brownfield upgrades worth around $4.2 billion, but have yet to submit their detailed projects to Inter State Gas Systems (ISGS). The refineries - Attock, National, Pakistan, and Cnergyico Pakistan - signed the deals on September 24. The projects aim to improve fuel quality, convert Bottom-of-the-Barrel, expand capacity, and undertake other refinery upgrades.

Executives of the refineries say the agreements confirm their commitment, as they continue to finalize technical configurations, costs, financing arrangements, and engineering packages. The four projects combined could require about $4.2 billion in investments. Including Pak-Arab Refinery Company's $600 million Green Fuel project, total investments could reach $4.8 billion.

The upgrades are expected to raise Pakistan's crude oil refining capacity from 450,000 to 550,000 barrels per day, enhance fuel quality, and cut furnace-oil production. Attock Refinery plans a $600 million upgrade focusing on fuel quality, naphtha treatment, and Diesel Hydro-Desulphurisation unit improvements. The project is expected to boost motor-spirit production by 25 percent and meet Euro-V diesel standards.

Pakistan Refinery's $1.8 billion project seeks to nearly eliminate furnace-oil production and double crude-processing capacity from 50,000 to 100,000 barrels per day. The company is seeking Chinese financing, which requires a sovereign or corporate guarantee from Pakistan State Oil. National Refinery is considering a $300 million to $800 million hybrid Green Fuel and Bottom-of-the-Barrel project, starting a six-month feasibility study to finalize the configuration.

The refinery aims to increase crude-processing capacity from 50,000 to 70,000 barrels per day. Cnergyico Pakistan is preparing a $1.2 billion upgrade to raise crude-processing capacity from 156,000 to 200,000 barrels per day, including Green Fuel, Bottom-of-the-Barrel conversion, and a new Single Point Mooring facility. Pak-Arab Refinery Company hasn't signed the upgrade agreement yet but plans to do so before October 24.

It is developing a $600 million Green Fuel project to further reduce furnace-oil production and boost motor gasoline and high-speed diesel production. Once complete, the upgrades are projected to cut furnace-oil production from 15,417 tons per day to 5,714 tons per day, increase motor gasoline output from 10,702 to 18,402 tons per day, and raise high-speed diesel production from 21,237 to 29,517 tons per day.