ISLAMABAD: Pakistan’s five oil refineries are expected to sign agreements with the government on September 3 to launch a long-delayed modernization program that could attract around $6 billion in investment, according to an industry source familiar with the matter.
The agreements will bring Pak Arab Refinery Limited (PARCO), Pakistan Refinery Limited (PRL), National Refinery Limited (NRL), Cnergyico and Attock Refinery Limited (ARL) under the government’s revamped Brownfield Refinery Upgradation Policy.
The policy aims to modernize the country’s aging refining infrastructure, increase the production of cleaner fuels and reduce Pakistan’s reliance on imported petroleum products.
Officials from the Petroleum Division, Inter State Gas Systems (ISGS) and the five refineries have been holding daily meetings to finalize the agreements ahead of the planned signing, the source said.
“Yesterday, there was a meeting for agreement finalization,” the source said, adding that discussions were continuing to finalize the draft agreements.
All five refineries are expected to sign the agreements collectively on Thursday, the source added.
The Petroleum Ministry said last week that the refineries were ready to sign the agreements in early September, with the planned upgrades expected to attract more than $6 billion in investment.
Petroleum Minister Ali Pervaiz Malik has said the modernization program will enable domestic refineries to produce Euro-5 standard fuels and help reduce the country’s dependence on imported petrol and diesel.
The Brownfield Refinery Upgradation Policy was initially introduced in 2023 and subsequently amended following years of delays and disagreements over its implementation. Its latest version was approved in July.
The policy offers incentives to existing refineries to upgrade their facilities, increase petrol and diesel production and significantly reduce the production of lower-value furnace oil.
ISGS was designated in August as the implementing entity for the policy on behalf of the Petroleum Division. Its responsibilities include signing upgrade agreements, monitoring projects and administering refinery upgrade accounts.
However, the signing of the agreements will mark only the beginning of a lengthy modernization process.
“Agreement signing is the first step,” the industry source said, explaining that each refinery would then conduct feasibility studies, technical assessments and other engineering work. The overall process is expected to take around seven years.
Each refinery will develop its own feasibility studies, engineering plans and investment program as part of the modernization initiative.
Pakistan currently has crude-processing capacity of around 350,000 barrels per day across the five refineries. However, the sector has faced challenges due to aging infrastructure, low-value fuel production and competition from imported petroleum products.
The government considers refinery modernization crucial for strengthening the country’s energy security, particularly following recent disruptions to international supply routes amid the Iran conflict.
Also Read: Saudi Arabia to Invest $10 Billion in Gwadar Oil Refinery
Petroleum Ministry spokesman Zafar Abbas did not respond to requests for comment on the planned signing date or other details of the modernization projects.
