Oil refineries ink plant upgrade agreements

Oil refineries have signed plant upgrading agreements with the government-nominated entity – Inter State Gas Systems (ISGS) – paving the way for around $6 billion in investments aimed at producing high-efficiency fuels under the new oil refinery policy. According to industry officials, Attock Refinery, National Refinery, Pakistan Refinery and Cnergyico Pk inked the agreements on Thursday whereas Pak Arab Refinery (Parco) is expected to sign it soon. The government, especially Minister of Petroleum Ali Pervaiz Malik, took the lead in removing bottlenecks to the new refinery policy. Cnergyico Pk CEO Amir Abbassciy told The Express Tribune that the signing of the refinery up-gradation agreement was a remarkable achievement and a long-awaited milestone for Pakistan's refining sector. "We extend our appreciation to the prime minister, the federal minister of petroleum and all government officials and stakeholders whose dedicated efforts and continued support have made this landmark development possible," he said, adding that Cnergyico was fully committed to the successful implementation of the project. In line with the refinery policy framework, the company has structured its up-gradation project into three phases. The first phase will focus on shift to Euro V-compliant fuels, the second phase will target a reduction in fuel oil output, while the third phase will involve enhancement of refinery capacity. He added that Cnergyico was already at an advanced stage of project implementation and remained committed to moving forward expeditiously. "We believe this project will play an important role in modernising Pakistan's refining infrastructure, improving the quality of locally produced petroleum products, reducing dependence on imported refined fuels and strengthening the country's long-term energy security." Attock Refinery CEO Adil Khattak said the signing of up-gradation agreements by Pakistan's refineries, namely Attock Refinery, National Refinery, Cnergyico and Pakistan Refinery, and later by Parco, marked a historic milestone for the refining industry and the tangible commencement of what was arguably the largest coordinated industrial investment programme ever undertaken in Pakistan, involving around $6 billion of investment over the next five years. He said those projects would fundamentally modernise Pakistan's refining infrastructure, enable production of cleaner Euro-V fuels, substantially reduce furnace oil production, replace significant quantities of imported petroleum products and strengthen the country's energy security. "For those of us who have remained involved with this initiative from its inception, today's (Thursday's) achievement has particular significance. The journey began with the first draft of the refining policy in December 2019, followed by its approval in August 2023 and subsequent amendments before finally reaching implementation today – almost seven years later." The delay has come at a considerable cost. Industry estimates indicate that refinery up-gradation can save Pakistan around $1.5 billion annually in foreign exchange. Recent geopolitical developments have also reinforced something the refining industry has emphasised for years: domestic refining capacity is not merely a commercial consideration; it is a strategic national asset. Khattak stressed that reaching the milestone deserved recognition and celebration. It would not have been possible without the passionate, persistent and resilient leadership of Federal Minister of Petroleum Ali Pervaiz Malik, his team in the Petroleum Division and the support of other relevant government institutions. "Their efforts to remove the remaining impediments have been instrumental in translating a long-pending policy into implementation," he said. "The signing, however, is not the end of the journey. It is the beginning of an even more challenging phase as the five refineries translate their commitments into financing, engineering, procurement, construction and commissioning of complex projects within the stipulated five-year period," he observed, adding that having personally remained involved in the formulation of the policy from the beginning and witnessed its many ups and downs, "I can fully appreciate the significance of this occasion". "For Pakistan's refining industry, our energy security and the industrial development of the country, this is truly a golden day," he added.