Tariq Kirmani, Chairman of Pakistan Refinery Limited (PRL) and Zahid Mir, Managing Director/CEO of PRL, have shared the salient feature of the PRL expansion project, costing US$1.7 billion at the august gathering at the Company flagship event, PRL Connect 2024, on Friday, January 26, 2024, at a local hotel, Karachi, under the theme “Powering Progress, Doubling Capacity.”

The project aims to upgrade from the current hydro Skimming to a Deep Conversion refinery to sell more profitable valued products and no production of HSFO. Motor gasoline and high-speed diesel production will increase by 34.9% and 44.7%, respectively.

The PRL expects funding of $150-200 million under REUP contribution as an incentive under the refinery policy. The original time frame of completion was five years, but management will try to bring the project online in four years. The PRL is optimistic that a new product, Propylene 457,000tpd, will be part of production, and 100% will be exported.

Regarding local financing arrangements, PRL has already appointed UBL and GS Global as financial advisors while arrangements are being made to source foreign funding for the project. PRL signed an agreement with Wood Group UK Limited (Wood) in Dubai on May 19, 2022, appointing them as the Front End Engineering Design (FEED) Contractor for the Refinery Expansion and Upgrade Project (REUP). The technology is sourced from Honeywell UOP, USA and Axens of France.

A handout from PRL said that the event provided industry leaders, stakeholders, and partners a platform to converge and explore PRL’s transformative journey towards a sustainable energy future. A question-answer session also clarified the project’s local financing and foreign funding with a time of four years.

Key Highlights:

1.    Exceptional Operational Performance: PRL’s Chairman of the Board of Directors highlighted the company’s stellar operational performance in the current and last quarter, achieving record-breaking profits, 100% plant availability, and the Company’s highest-ever sales of Diesel and petrol in September 2023.

2.    Strategic Shift with Brownfield Refinery Policy: PRL showcased its strategic decision to embrace the Brownfield Refinery Policy, approved by the Federal Cabinet in August 2023. The policy, lauded for encouraging existing refineries to upgrade and expand, positions PRL for a transformative change in the refining industry.

3.    Pioneering Refinery Expansion & Upgrade Project (REUP): PRL is spearheading a transformative Refinery Expansion & Upgrade Project (REUP) aimed at doubling the crude processing capacity from 50,000 to 100,000 barrels per day. This strategic initiative not only ensures a significant boost in capacity but also focuses on enhancing profitability. The project is designed to zero Furnace Oil production, redirecting efforts towards maximising the production of highly profitable products like Petrol and Diesel of Euro V standards. PRL’s REUP initiative aims to set new industry benchmarks for financial success and sustainability by aligning with market demands and prioritising lucrative fuel products.

4.    Shareholder’s Support: A major development highlighted during the event was the shift in majority shareholding to Pakistan State Oil (PSO), signalling PSO’s strong commitment to upgrading and expanding PRL. This move also ensures vertical integration for PSO as it secures a reliable supply chain.

5.    National Impact: The Chairman emphasised that REUP benefits not only PRL but also PSO and the entire country. The project generates employment opportunities, stimulates economic activity, and contributes significantly to the national GDP, reducing import dependency and saving valuable foreign exchange.

6.    Invitation to Partnerships: The Chairman thanked the attendees and invited banking and financial institutions to join hands with PRL in realising the ambitious REUP project. The call for partnerships aims to forge ahead, doubling capacities, embracing sustainability, and contributing to Pakistan’s progress.

Quotes:

•    Tariq Kirmani, Chairman, PRL Board: “PRL Connect 2024 marks a pivotal moment as we unveil our vision for a sustainable energy future. Our achievements and strategic decisions pave the way for transformative change, and we invite partners to join us in this ambitious journey.”

•    Zahid Mir, Managing Director/CEO: “Our journey towards doubling capacity is not just about numbers; it is about laying the foundation for a self-sufficient and sustainable energy future for Pakistan. We invite banking partners to become integral parts of our journey.”

About Pakistan Refinery Limited:

Pakistan Refinery Limited was incorporated in Pakistan as a public limited company in May 1960. The company is engaged in the production and sale of petroleum products. The Company is a subsidiary of Pakistan State Oil Company Limited (PSO).