The Pakistan Refinery Limited (PRL) and the United Energy Group of China (UEG) on October 18 signed a memorandum of understanding (MoU) to invest $1.5 billion in Pakistan’s petroleum sector to reduce the South Asian country’s dependence on expensive imported fuels and overcome energy crisis.
The MoU was signed during the ongoing Belt and Road Forum in Beijing, being attended by representatives of more than 100 countries. Pakistan’s Caretaker Prime Minister Anwaar-ul-Haq Kakar is also in China to attend the two-day conference.
PM Kakar and Pakistan’s Caretaker Energy Minister Muhammad Ali attended the MoU signing ceremony, according to the Prime Minister’s Office.
“Petrol and high-speed diesel obtained from the refinery will not only replace expensive imported fuel, but the refinery’s petrol production capacity would increase from 250,000 metric tons to 1.6 million metric tons,” PMO’s statement said. The agreement is also expected to increase high-speed diesel’s production capacity to 2 million metric tons from 0.6 million metric tons, the statement added.
PRL signs oil supply deal with Russia
PRL also struck a long-term oil supply contract with Russia. Pakistan is expected to receive its inaugural shipment under the long-term crude oil import agreement with Russia in December of this year, The Express Tribune reported Thursday, citing sources. PRL was chosen as a procuring entity to buy crude oil from Russia based on agreements made in a January 2023 meeting.
PRL will buy Russian crude oil based on commercial agreements, ensuring it complies with Pakistan’s international commitments and global standards for such transactions. The firm has already imported and successfully processed 100,000 tons of Russian Urals crude.
PRL’s refinery expansion and upgrade project
Additionally, PRL is undergoing a transformative expansion and upgrade project aimed at doubling its current refining capacity from 50,000 to 100,000 barrels per day. The project’s main objectives include:
- Meeting local demand
- Shifting to deep-conversion processes
- Producing environmentally compliant Euro V high-speed diesel and motor spirit, and
- Discontinuing the production of loss-incurring furnace oil
The expansion is expected to significantly boost production, with MS output rising from 250,000 tons to 1.5 million tons, and HSD production increasing from 600,000 tons to approximately 2 million tons.
