Pakistan Refinery Limited (PRL) is all set to sign a supplemental agreement with the Oil and Gas Regulatory Authority (OGRA). This agreement will pave the way for a transformative upgrade and expansion project to double PRL’s refining capacity from 50,000 barrels per day (bpd) to 100,000 bpd. Crucially, the project will also enable PRL to produce EURO V standard fuel, saving the company billions of rupees annually in penalties for non-compliance with environmental regulations.
These agreements followed the inking of a deal with the regulator, the Oil and Gas Regulatory Authority (OGRA), to access incentives outlined in the new refinery policy. The upcoming signing of the supplemental agreement will significantly enhance the incentives offered in the amended brownfield policy approved in February 2024, highlighting PRL’s proactive approach to regulatory compliance and its determination to capitalize on the incentives outlined in the new refinery policy.
PRL’s expansion represents an investment aiming at ensuring long-term sustainability. Plans include increasing Motor Spirit production by more than six times, increasing High-Speed Diesel by three times, and eventually eliminating Furnace Oil from its product portfolio. Without these upgrades and expansion, the company’s long-term sustainable operation will remain a question mark.
In the meantime, PRL is focusing on operational excellence to ensure that its existing operations remain sustainable. Consequently, PRL surpassed production targets for the second quarter of 2023-24, significantly improving its production mix and setting new industry standards.
Despite economic challenges and low local demand for furnace oil, PRL’s financial performance remains robust. The company recorded a second-quarter financial close of 2.0 billion after a record profit of 4.5 billion in the first quarter of this year. The six-month profit stands at 6.5 billion, marking the fourth consecutive year of profit for PRL, which includes the highest-ever profit of 12.5 billion in 2022. PRL’s commitment to maximizing production efficiency and revenue, even in challenging market conditions, is evident in its strategic choices.