KARACHI, July 18: Shell Pakistan Limited (SPL) plans to invest approximately $31.3 millions in 2002 (which also includes $29 million for white oil pipeline project) for the up-gradation and development of its storage and distribution facilities.

This was stated by the SPL director, external affairs, Saleemuddin Ahmed, at a press briefing on Thursday at Shell’s Keamari installation. Installation manager, Mohammed Owais Sultan, supplying logistic manager, Saleem Butt, regional transport manager, Lt-Col (Retd) Iftikhar Uddin and Iqtidar Siddiqui, manager finance also spoke on the occasion.

An overall growth in the industry storage is expected due to White Oil Pipeline Project and associated storage of 180,000 tons. Existing pipeline has a storage capacity of over 150,000 tons, he said.

To ease the pressure on road transportation of oil and for purpose of economy, oil companies have jointly undertaken laying of the white oil pipeline from Karachi to Multan. Shell is the second largest investor in the project with 26 per cent shareholding in the $480 million project.

The company has been investing in up-grading its storage and oil transportation facilities consistently over the last few years. The objective of this multi-million dollar investment is to bring up the standard of these facilities to world-class level, he said.

Shell has already invested $100 million in oil exploration with LASMO and plans to invest more in offshore oil exploration in Pakistan.

Saleemuddin said various expansion plans of existing facilities undertaken by the company, will bring them at par with global health, safety and environment (HSE) standards.

Plans to develop storage by third party and supporting an overall increase in industry storage capacity are also on the anvil, he added.

The storage capacity of oil products by oil marketing companies (OMCs) is currently 832,000 tons in which Shell has 153,000 tons as compared to PSO’s 631,000 tons and Caltex’s 48,000 tons.

Pakistan has a total road network of 6,638 km out of which 45 per cent has been declared dilapidated, while 11 per cent will have only one year serviceable life. According to an estimate by a leading donor agency, the country needs $0.5 billion for sustainable maintenance of the road network.

On transportation of oil products, the share of road accounts for 65 per cent followed by 26 per cent through pipelines and nine per cent by rail route. When the white oil pipeline project will be completed by first quarter of 2004, more than 50 per cent share from road will be transferred to pipeline.

The company officials said that Shell is committed to prioritizing environmental and consumer protection through the implementation of global HSE standards and towards ensuring product quality through the supply chain. Oil product supply chain includes: crude procurement, refining, supply and freighting (Sea, Pipeline, Land), depot network for storage, distribution to retail outlets.

Officials said that depot rationalization programme undertaken by OMCs is likely to increase storage capacity at major locations and reduce depots, which do not meet proper HSE requirements.