Chinese firm to invest $1.5b in PRL
PRL signs long-term crude oil agreement with Russia
Staff Report
Chinese firm United Energy Group (UEG) will invest $1.5 billion in Pakistan Refinery Limited (PRL) to double its refining capacity.
Pakistan Refinery Limited (PRL), a stalwart in the refining sector, is embarking on a transformative journey with the Refinery Expansion and Upgrade Project (REUP).
This ambitious project aims to propel PRL into a sustainable future by doubling its refining capacity from the current 50,000 barrels per day (bpd) to 100,000 barrels per day (bpd).
The primary objectives of the REUP are to meet local demand, convert the refinery from basic hydroskimming to deep conversion, and produce environmentally compliant EURO V HSD (Diesel) and MS (Petrol), thereby eliminating the production of loss-making furnace oil. MOU Signed: OGDCL to Make Equity Invest in PRL
This strategic shift aligns with PRL’s commitment to producing cleaner and environmentally friendly fuels to meet the growing market demands.
Currently, PRL produces 250,000 Metric Tons (MT) of MS (petrol) per year. However, with the expansion and upgrade project, the production is anticipated to increase significantly to 1.5 Million MT/year. Likewise, the production of High-Speed Diesel (HSD) is expected to rise from around 600,000 MT/year to approximately 2 Million MT/year post-upgrade.
In this significant stride towards achieving these objectives, PRL and United Energy Group (UEG) have formalized their collaboration through a memorandum of understanding (MoU) signed on October 18, 2023, in China.
This historical moment was graced by the Honourable Prime Minister of Pakistan and the Minister of State for Energy, Power, and Petroleum.
Under the MoU, the Parties have expressed their respective desire and willingness to establish a strategic cooperation relationship on the basis of mutual interest in the energy industry in Pakistan.
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.
This strategic collaboration between two prominent entities in Pakistan’s energy industry is anticipated to have a profoundly positive impact on the sector’s growth and development, ultimately contributing to a sustainable and environmentally responsible energy landscape in Pakistan.
PRL has also announced a Rs.4.5 billion net profit in the July- September quarter in a board meeting held on Wednesday.
Long-term oil supply agreement with Russia
Sources said that Pakistan Refinery Limited (PRL) has signed a long-term crude oil supply agreement with Russia and the first oil cargo is expected to arrive in Pakistan in December this year.
It was nominated as a procuring entity for the purchase of Crude Oil from the Russian Federation as per the commitments made at the Pakistan – Russia Inter-Governmental Commission (IGC) held in January 2023.
PRL would carry out the task of purchasing crude oil from the Russian Federation as per commercial terms, as agreed from time to time, without violating the International Commitments of Pakistan and the International Framework governing such transactions.
PRL had already imported 100,000 metric tons of Russian oil and processed it successfully. It had also made a profit over those supplies of Russian crude oil.
In a recent development, PRL, on the sidelines of the Russian Energy Forum, has signed a long-term crude supply agreement with its Russian counterparts for the supply of crude oil of mutually agreed specifications. It is expected that the first cargo will be delivered to PRL later this year.
