KARACHI: Chinese companies have expressed keen interest in expanding and upgrading Pakistan Refinery Ltd (PRL), which presents a significant opportunity.

PRL expressed its excitement about the development in a notice to the Pakistan Stock Exchange on Wednesday. “In a significant step towards enhancing Pakistan’s refining capabilities, PRL senior management recently visited China to engage with engineering, procurement, and construction (EPC) contractors and financial institutions,” said the notification.

These discussions were highly productive, laying the groundwork for the forthcoming phases of PRL’s refinery expansion and upgrade project (REUP). “There was keen interest from Chinese companies to collaborate with PRL on this mega opportunity,” said the notice.

The REUP is a significant initiative aimed at doubling the refinery’s crude processing capacity from 50,000 barrels per day (bpd) to 100,000 bpd. The adoption of a state-of-the-art Deep Conversion Refinery configuration will complement this expansion.

“The upgraded refinery will utilise advanced technology to meet stringent environmental standards, including the production of Euro V standard fuels, thereby significantly enhancing PRL’s operational efficiency and environmental footprint,” said the company.

“PRL is ahead of all refineries in Pakistan right now in terms of REUP,” stated Managing Director and CEO Zahid Mir.

“The meetings with EPC contractors in China yielded very positive results. We have developed a comprehensive plan to award the EPC contract by the end of this year and work towards achieving the project’s financial close by mid-next year. The feedback from these discussions has been overwhelmingly supportive,” he said.

“In addition to these strategic meetings, PRL has proactively engaged with the Oil and Gas Regulatory Authority (Ogra) to sign a supplementary agreement. The PRL has requested amendments to the existing agreements to align with the updated brown-field policy,” said Mr Mir.

He said this step is crucial for securing the regulatory support for the REUP’s successful implementation and long-term sustainability.

The project represents a substantial investment in Pakistan’s energy infrastructure.

“By doubling capacity, producing value-added products, and adhering to international environmental standards, including the production of Euro V compliant MS and HSD, PRL aims to strengthen its position in the global energy market and contribute significantly to the country’s economic growth,” he said.

Published in Dawn, May 23rd, 2024