Pakistan Refinery Ltd (PRL) said it remains committed to executing the Refinery Expansion and Upgrade Project (REUP), which will double. The refinery’s crude processing capacity is from 50,000 to 100,000 daily barrels. The Work on Front-End Engineering Design (FEED) of REUP is progressing as per the agreed timeline with targeted completion by September 2024, and as the next step, license and engineering agreements have been signed with technology licensors.
The search for the right strategic investor continues, and PRL is engaged with potential investors in this regard, according to the last financial report of the refinery.
The Company is optimistic about the next financial result for Oct-Dec 2023 period as a good positive trend was noticed in the financial year 2023-24which began with good refining margins, which complemented the Company’s operational strategy and helped the Refinery generate a profit after tax of Rs 4.48 billion (September 30, 2022: Rs 1.03 billion) despite the continued devaluation of the of Pak Rupee and challenges in obtaining confirmation of crude oil LCs. During the quarter, the Company achieved another milestone of the highest-ever monthly production and sale of High-Speed Diesel (HSD) of ~560,000 barrels and ~ 632,000 barrels, respectively, in September 2023.
Recalled here that the Government of Pakistan announced the “Refining Policy for Upgrade of Existing / Brownfield Refineries 2023”. The Policy provides incentives of 2.5% on HSD and 10% on MS in ex-refinery pricing for six years. These incentives will support and play a pivotal role in the completion of the project. Certain modalities of the Policy are currently under discussion with OGRA and will be finalised shortly.
Furthermore, PRL and the United Energy Group of China (UEG) signed a memorandum of understanding (MoU) recently. The MoU was signed between the two firms during the ongoing 3rd Belt and Road Forum in Beijing. Pakistan’s Caretaker Prime Minister Anwaar-ul-Haq Kakar and Pakistan’s Caretaker Energy Minister Muhammad Ali witnessed the signing ceremony of the agreement between the two firms.
Under the MoU, the Parties have expressed their desire and willingness to establish a strategic cooperation relationship based on mutual interest in Pakistan’s energy industry. The Parties will enter into good faith negotiations to identify potential cooperation and collaboration opportunities, including equity investment in PRL as a strategic investor (with adequate board representation) for the upgradation and growth of the refinery.