Pakistan’s refinery modernisation drive is moving forward with major investment plans. Five domestic refineries are preparing projects worth $4.5 billion to $5 billion.
The planned investments cover green fuel, bottom-of-barrel projects, capacity expansion and related infrastructure. Together, these projects could significantly reshape Pakistan’s refining industry.
The development comes as the government works to finalise implementation agreements with local refineries. Meanwhile, the amended Brownfield Refineries Upgradation Policy has introduced a tighter deadline.
Parco Moves Ahead With $600 Million Green Fuel Project
Pak-Arab Refinery Company (Parco) has agreed to proceed with a $600 million green fuel project.
Parco is Pakistan’s largest refinery. It operates as a joint venture between Pakistan and the United Arab Emirates.
The company has a 60:40 shareholding structure. However, Parco took additional time to determine the most suitable approach for its refinery upgrade.
The company commissioned two studies to assess different upgrade options. Following the assessment, its management informed the government about its decision.
Parco has now opted for the green fuel project instead of a standalone bottom-of-barrel project.
The company is also expected to sign its upgradation agreement within the required timeframe. Furthermore, the government is working to finalise agreements with all local refineries.
The agreements could be signed together during a high-level ceremony attended by Prime Minister Shehbaz Sharif.
Parco Targets Lower Furnace Oil Production
Parco has already reduced its furnace oil share through operational measures.
Its furnace oil production has fallen from around 20% to 14%. However, the company expects that share to decline further after implementing the green fuel project.
During the first phase, furnace oil production could fall to around 10% to 11%. The second phase eventually aims to eliminate furnace oil production altogether.
At the same time, Parco will have to shift completely from its existing Euro-III standard to Euro-V specifications.
The upgrade is also expected to increase motor gasoline production. Output is projected to rise from around 3,678 tonnes per day to 4,023 tonnes per day.
Diesel production is also expected to increase under the modernisation plan.
PRL Plans a Major $2 Billion Refinery Upgrade
Pakistan Refinery Limited (PRL) is pursuing one of the most ambitious projects among the country’s domestic refineries.
The company plans to invest between $1.8 billion and $2 billion in a bottom-of-barrel project. The project aims to eliminate furnace oil production. It will also improve the refinery’s overall product mix.
More importantly, PRL plans to double its crude refining capacity.
Its current capacity stands at around 50,000 barrels per day. The company plans to increase that figure to 100,000 barrels per day.
This expansion could significantly increase PRL’s ability to process crude and produce higher-value petroleum products.
Attock Refinery Confirms Its Upgrade Plans
Attock Refinery Limited (ARL) has also confirmed its readiness to sign an upgradation agreement with the Petroleum Division.
The refinery remains committed to a project announced in 2023 under the original Brownfield Refineries Upgradation Policy.
The project carries an estimated cost of around $600 million. It includes several major processing and infrastructure upgrades.
These include a Continuous Catalytic Reformer (CCR) and a revamped Diesel Hydro Desulphurising Unit (DHDS).
The plan also includes a Kerosene Hydrotreating Unit, associated tankage and utilities. In addition, ARL will develop a biofuel facility required under the amended policy.
The upgrades will enable ARL to meet Euro-V specifications.
Meanwhile, the refinery expects motor gasoline production to increase by around 25%.
Cnergyico Plans $1.2 Billion Investment
Cnergyico Pakistan Limited (CPL) is also preparing a major investment programme.
The private refinery plans to invest around $1.2 billion across several projects. These include green fuel, bottom-of-barrel processing and capacity expansion.
The company also plans to develop a new Single Point Mooring (SPM) facility.
CPL currently has crude refining capacity of around 156,000 barrels per day. However, it aims to increase capacity to approximately 200,000 barrels per day.
The company has divided its investment programme into three phases.
The first phase focuses on producing petroleum products meeting Euro-V and Euro-VI standards. Work on this phase is already underway.
The second phase involves the bottom-of-barrel project. Studies are currently underway to determine the appropriate configuration.
The third phase focuses on increasing refining capacity. It will also include the installation of the SPM facility.
The planned SPM would support the import and export of crude oil and finished petroleum products.
Under the government’s refinery policy, CPL is projected to increase gasoline production to around 6,500 tonnes per day.
Its diesel production could also reach nearly 11,000 tonnes per day. Meanwhile, the refinery aims to sharply reduce furnace oil output.
NRL Considers a Hybrid Upgrade
National Refinery Limited (NRL) is considering a different approach to its modernisation plans.
The refinery is weighing a hybrid green fuel and bottom-of-barrel project. The estimated cost ranges between $300 million and $800 million.
NRL has already achieved production of Euro-V high-speed diesel.
However, the company is still assessing the most suitable configuration for motor spirit and other finished petroleum products.
The proposed hybrid project would substantially reduce furnace oil production. At the same time, NRL plans to expand its crude refining capacity.
The refinery currently has capacity of around 50,000 barrels per day. It plans to increase this to 70,000 barrels per day.
However, NRL has not yet finalised the scope and configuration of its upgrade project.
Why the New Refinery Policy Matters
The refinery projects are moving forward under the amended Brownfield Refineries Upgradation Policy.
The revised policy has placed greater pressure on refineries to move from commitments toward implementation.
Under the amended rules, refineries must sign implementation agreements within 45 days.
Previously, the deadline stood at 60 days.
The shorter timeframe means refineries now face greater pressure to finalise their plans. Consequently, decisions over project scope and investment commitments have become more urgent.
The government is also working to complete agreements with all local refineries. These agreements are expected to formalise the next stage of the modernisation drive.
A Potential $5 Billion Transformation
The combined plans of Parco, PRL, ARL, CPL and NRL represent a potential $4.5 billion to $5 billion investment in Pakistan’s refining sector.
Each refinery is following a different upgrade path. However, their projects share several broad objectives.
These include reducing furnace oil production, improving fuel quality and increasing refining capacity. They also involve greater production of higher-value petroleum products.
Parco is moving ahead with its green fuel project. Meanwhile, PRL is targeting a major bottom-of-barrel expansion.
ARL is preparing a broad upgrade involving several processing units. CPL is combining fuel upgrades with capacity expansion and new import-export infrastructure.
NRL, on the other hand, is still assessing a hybrid modernisation option. Together, these projects could mark a significant change for Pakistan’s refining industry.
For now, however, several projects remain at different stages of preparation. Some companies have confirmed their plans, while others are still finalising technical details.
The government’s tighter implementation deadline could therefore become an important test for the entire refinery modernisation programme.
If the planned agreements move ahead within the stipulated timeframe, Pakistan’s refining sector could enter a major new phase of investment, capacity expansion and fuel-quality upgrades.
