Pakistan Refinery Ltd (PRL) has decided to expand and upgrade its production capacity at an estimated cost of $1.2 billion, a securities filing said on Tuesday.
Speaking to Dawn, PRL Managing Director Zahid Mir said the project will double the company’s installed refining capacity to 100,000 barrels per day in five years.
“Daily petrol production will increase from 750 tonnes to 4,000 tonnes while diesel production will rise from 2,000 tonnes to 5,000 tonnes,” he said.
PRL is currently operating at around 60pc of its installed capacity, he said. That’s mainly because the demand for its major product — furnace oil — went down substantially post-2017 as the country changed its fuel mix for power generation in favour of imported liquefied natural gas (LNG). The capacity utilisation levels are low across all five refineries for the same reason.
The government is now encouraging the refineries to start producing Euro V and VI fuels while phasing out their furnace oil production capacities.
“The share of furnace oil, which is currently 30pc of our output, will go down to just 2pc. We’ll use that for internal consumption,” said Mr Mir.
Producing Euro V–compliant diesel and petrol, increasing the overall installed capacity and reducing the production of furnace oil are the three stated objectives of the $1.2bn expansion and upgrade project.
In the immediate term, PRL is going to undertake a front-end engineering design (Feed) study for the expansion project at an estimated cost of $50m, he said. The Feed study, in turn, will determine the exact project cost and lead to the financial close and the award of an engineering, procurement and construction (EPC) contract.