[🇵🇰] Gas, Oil & Refinery News

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Pakistan has successfully secured its second LNG cargo from the State Oil Company of Azerbaijan Republic (SOCAR) under a Government-to-Government Framework Agreement, with delivery scheduled for February 2024.

This achievement, following the first cargo in December 2023, strengthens the energy partnership between Pakistan and Azerbaijan, ensuring a consistent supply of LNG to meet the country's growing energy needs.

The agreement is crucial for Pakistan's winter energy demand, reducing dependence on spot LNG purchases and enhancing resilience against global price fluctuations and geopolitical uncertainties.

The historic and flexible terms of the agreement highlight a breakthrough in the relationship between PLL and SOCAR, contributing to Pakistan's energy security.

 

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Govt approves work on Pakistan section of IP gas pipeline project​

Work to begin from Pakistan-Iran border up to Gwadar in the initial phase

Our Correspondent
February 23, 2024

The Cabinet Committee on Energy (CCoE) granted approval on Friday for the initiation of work on the 80-kilometer segment of the Iran-Pakistan (IP) gas pipeline project within the country.

According to a press release, the committee, acting on a recommendation from the Petroleum Division, has endorsed the commencement of the project, starting from the Pakistan-Iran border up to Gwadar in the initial phase.

Inter State Gas Systems (Pvt) Ltd. is set to execute the project, which will be funded through the Gas Infrastructure Development Cess (GIDC). All relevant divisions have given their positive approval to move forward, with the primary objective of meeting the increasing energy needs of Pakistan and ensuring a stable supply of gas to its citizens.

The press release emphasised the significance of the project for enhancing the energy security of Pakistan and instilling confidence in the local industry through improved gas supplies. The project is anticipated to stimulate economic activity in the Balochistan province, thereby contributing to the overall economic progress of Pakistan.

Earlier in the week, The Express Tribune reported that Islamabad has committed to completing the first phase of the 80-kilometer IP gas pipeline project within its territory to avert a potential $18 billion penalty.

Iran has granted a 180-day extension until September 2024, aiming to avoid litigation in international courts. Experts suggest that diplomatic relations between Pakistan and Iran could be strained if legal action is pursued by Iran to safeguard its rights concerning the pipeline project.

Despite the sanctions imposed by the United States, Pakistan has decided to proceed with the construction of the IP gas pipeline within its borders to fulfil its commitment to Tehran.

Historically, Pakistan and Iran have enjoyed good relations, particularly during the reign of the Pakistan Peoples Party (PPP). During Asif Ali Zardari’s presidency, both countries signed a Gas Sales Purchase Agreement (GSPA), binding Pakistan to commence construction on the IP project. In the past, Pakistan imported Iranian oil – the supply, however, ceased in 2010 when Pakistani refineries failed to make payments. Although payment was never a significant issue between the two nations – both had worked out currency swaps and barter trade arrangements – experts believe the primary reason for the fallout was the US’s reluctance to show flexibility regarding oil and gas trade between Pakistan and Iran.

 

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Global lubricant giant Gulf Oil enters Pakistan​

BR Web Desk
February 24, 2024

In a key development for the country’s oil sector, global lubricants giant Gulf Oil announced that it has entered the Pakistani market in partnership with OTO Pakistan.

As per a press statement released on Saturday, an agreement in this regard was signed between Mike Jones, CEO of Gulf Oil UK, and his counterparts representing OTO Pakistan, an oil marketing company (OMC), in London.

The development “will attract the interest of global petrochemical companies into the Pakistani oil market as a safe trade, investment and joint ventures destination,” said Tariq Mehmood, CEO of OTO Pakistan.

Gulf Oil is a global oil company that has a long history in the petroleum industry. It was originally founded in 1901 as the Gulf Refining Company in Texas, USA. Over the years, Gulf Oil expanded its operations internationally and became a prominent player in the oil and gas sector.

Meanwhile, OTO Pakistan, incorporated in 2008, is engaged in the marketing of petroleum products including furnace oil, high-speed diesel, motor gasoline, kerosene, lubricant, bitumen and jet fuels.

Talking about the partnership, CEO of OTO Pakistan said that Pakistan offers a huge market for lubricants and retail fuels; with a population of 245 million and at least eight million vehicles.

“Gulf Oil has been established since 1901 and supplies lubricants to 1,400 ports around the world. Oil trade is the mother of all trades and an essential one for the economic development of any country,” he added.

The development comes at a time when Pakistan, facing low foreign exchange reserves, remains keen on attracting foreign direct investment (FDI).

The government in this regard has also launched several programmes including the Special Investment Facilitation Council (SIFC) to lure in foreign investment.

Sharing his thoughts on attracting FDI flows, Mehmood, CEO of OTO Pakistan said that the prerequisite to bringing FDI into Pakistan is to project the country’s soft image and present it as a lucrative market for international companies.

“In this specific case, Gulf Oil is a huge company with a presence in 100 countries across the globe, and their doing business with Pakistan will set an example for other global petrochemical conglomerates to tap into the Pakistani market,” he said.

 

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Amended oil refinery policy notified​

• Refineries’ upgradation will bring in an investment of US $5-6 billion and not only result in cleaner environment-friendly fuels but also major savings of precious foreign exchange

Recorder Report
February 25, 2024

ISLAMABAD: The Ministry of Energy (Petroleum Division) has notified the amended oil refining policy after its approval by the Cabinet on February 15, 2024, as recommended by the Cabinet Committee on Energy (CCoE) in its meeting of February 6, 2024.

The policy, originally notified on August 17, 2023, has now been amended after taking into consideration the genuine concerns of the refineries on some of the clauses that would have made the proposed upgradation projects unviable.

The amendments were made after intense and prolonged consultation between the government, refineries, and independent financial and legal advisory firms.

When contacted, Adil Khattak, chairman Oil Companies Advisory Council (OCAC) and Chief Executive Attock Refinery Ltd stated that the policy will enable the oil refineries to undertake major upgradation projects to not only to comply with Euro-V specifications but also increase production of deficit products of petrol and diesel by 99 per cent and 47 per cent, respectively and also reduce production of furnace oil by 78 per cent, which because of drastically reduced demand in recent years often results in storage constraints forcing the refineries to reduce capacity utilisation.

The refineries’ upgradation will bring in an investment of US $5-6 billion and not only result in cleaner environment-friendly fuels but also major savings of precious foreign exchange.

He further said that the refineries’ upgradation policy would surely be termed as the most important achievement of the caretaker government and it is hoped that it would be implemented in its true letter and spirit.

The policy, which took more than four years in the making mainly due to changes in the governments and the bureaucracy, was initiated by Nadeem Babar as Special Advisor to the then Prime Minister, supported throughout by Shahid Khaqan Abbasi in his various capacities, and the final credit for taking on board all stakeholders after due diligence and independent professional input goes to Muhammad Ali, the outgoing caretaker Minister for Power and Petroleum.

The chairman of OCAC also pointed out that the OGRA and the Directorate General Oil role has been pivotal in formulation of the policy and will remain so in successful implementation of the policy.

 

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Refineries to enjoy 10% tariff protection​

Amended policy guarantees 7-year protection for refineries upgrading plants

 

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US Refuses Waiver over Pakistan-Iran Gas Pipeline Project​

Jahanzaib Ali
March 1, 2024

WASHINGTON DC: The Pakistan-Iran gas pipeline project has once again been delayed as the United States has expressed concerns about the project and has flatly refused to waive the sanctions imposed on Iran.

According to well-placed sources, Pakistan requested a waiver from the US on the sanctions imposed on Iran to resume the Pak-Iran gas pipeline project, but the US refused to give any concession. While flatly refusing, the U.S. also expressed its concern about this project.

It should be noted that there is a deadline of March this year to complete Pakistan’s part of the Pak-Iran gas pipeline project, and if Pakistan does not start the project by March, it will have to pay a fine of 18 billion US dollars.

Sources claimed that after America’s refusal, Pakistan has made it clear to Iran that Pakistan wants to complete this project, but due to the sanctions imposed on Iran, this project cannot be completed. Pakistan asked Iran to extend the March deadline in view of the current situation.

According to the agreement, Iran has prepared a 700-mile long pipeline for its part, while in Pakistan, a 500-mile long pipeline has been prepared and will go to Balochistan and Sindh.

The Pakistani caretaker government had approved the completion of the Pakistan-Iran pipeline project a few days ago, but after this approval, the United States officially expressed its concerns to Pakistan. After American reservations, Pakistan once again stopped the implementation of the project.

The Iran-Pakistan gas pipeline, commonly known as the Peace pipeline or IP Gas, is a complex initiative influenced by geopolitical tensions, economic factors, and international sanctions. Initially designed to transport natural gas from Iran to Pakistan, the project has encountered numerous challenges since its inception.

In March 2013, Presidents Zardari and Ahmadinejad inaugurated the project near Iran’s Chabahar port, signaling the start of the USD 7.5 billion venture. However, progress stalled due to US sanctions on Iran, despite Iran completing its portion of the pipeline. Negotiations must conclude by March 2024 to avoid legal complications, with Islamabad having until September 2024 to fulfill its obligations.

Both nations were trying exploring strategies to complete the pipeline outside the scope of US sanctions, emphasizing the project’s importance for their national interests but United States not ready to give any waiver.

 

[Lulldapull]

US Refuses Waiver over Pakistan-Iran Gas Pipeline Project​

Jahanzaib Ali
March 1, 2024

WASHINGTON DC: The Pakistan-Iran gas pipeline project has once again been delayed as the United States has expressed concerns about the project and has flatly refused to waive the sanctions imposed on Iran.

According to well-placed sources, Pakistan requested a waiver from the US on the sanctions imposed on Iran to resume the Pak-Iran gas pipeline project, but the US refused to give any concession. While flatly refusing, the U.S. also expressed its concern about this project.

It should be noted that there is a deadline of March this year to complete Pakistan’s part of the Pak-Iran gas pipeline project, and if Pakistan does not start the project by March, it will have to pay a fine of 18 billion US dollars.

Sources claimed that after America’s refusal, Pakistan has made it clear to Iran that Pakistan wants to complete this project, but due to the sanctions imposed on Iran, this project cannot be completed. Pakistan asked Iran to extend the March deadline in view of the current situation.

According to the agreement, Iran has prepared a 700-mile long pipeline for its part, while in Pakistan, a 500-mile long pipeline has been prepared and will go to Balochistan and Sindh.

The Pakistani caretaker government had approved the completion of the Pakistan-Iran pipeline project a few days ago, but after this approval, the United States officially expressed its concerns to Pakistan. After American reservations, Pakistan once again stopped the implementation of the project.

The Iran-Pakistan gas pipeline, commonly known as the Peace pipeline or IP Gas, is a complex initiative influenced by geopolitical tensions, economic factors, and international sanctions. Initially designed to transport natural gas from Iran to Pakistan, the project has encountered numerous challenges since its inception.

In March 2013, Presidents Zardari and Ahmadinejad inaugurated the project near Iran’s Chabahar port, signaling the start of the USD 7.5 billion venture. However, progress stalled due to US sanctions on Iran, despite Iran completing its portion of the pipeline. Negotiations must conclude by March 2024 to avoid legal complications, with Islamabad having until September 2024 to fulfill its obligations.

Both nations were trying exploring strategies to complete the pipeline outside the scope of US sanctions, emphasizing the project’s importance for their national interests but United States not ready to give any waiver.

Amazing that the US doesn't even mention waivers on Iran/ Turkey trade or Iran / Iraq trade? or Iran/ UAE trade? or Iran/ China trade? or Iran/ Russia/ trade? or soon to resume Iran/ India trade? Amazing no? Is keeping Pakistan regionally isolated part of Western policy?

 

[Lulldapull]

Just watch what happens soon. Either a big terrorist attack will happen in either Pakistan or Iran and it will derail this project as usual. US aur Israheel nay baaz nahi aana aur hamaray mulk main severe gas load shedding chal re hae for the last decade! Just watch: Pakistan’s moment of truth on Iran gas pipeline

 

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Refinery policy to cut imports​

Policy aims to double output of petrol, boost diesel production by 47%

Salman Siddiqui
March 07, 2024

KARACHI: The latest petroleum refinery upgradation policy offers financial incentives, encouraging Pakistan’s industry to significantly increase the production of high-premium products. The policy aims to double the output of petrol and boost diesel production by 47% in the coming years.

This multibillion-dollar and time-consuming initiative is expected to drastically reduce the import of refined products, thereby preserving precious foreign exchange reserves.

Survival for refineries hinges on upgrading their technology by installing deep-conversion refineries, a relatively new technology, alongside existing hydro-skimming refineries. According to a detailed report titled ‘Pakistan’s Refinery Sector Upgradation Policy to Incentivise Refineries’ by Arif Habib Limited (AHL), refineries endorsing the policy will receive additional tariff protection or deemed duty incentives, amounting to 10% for Motor Spirit (MS/petrol) and 2.5% for diesel for seven years.

The upgradation policy is projected to enable refineries to increase total production of MS (petrol) by over 99% and diesel by over 47%, while reducing the production of furnace oil by 78%.

Pakistan’s total average requirement for petroleum products over the last five years stands at 24 million tonnes. Of this, 11.35 million tonnes have been produced locally, while the remainder (12.90 million tonnes) was imported.

Although Pakistan has a total capacity of 20 million tonnes, it has failed to fully utilise it due to lower demand for furnace oil (FO) amid a shift in the energy mix within the power sector. Refineries are unable to significantly alter their production slate, resulting in reduced throughput, said the report.

The government, recognising the situation, announced a policy on August 17, 2023, for the upgradation of brownfield refineries, which was further amended in February 2024.

The government, with industry collaboration, prepared the policy. Respective refineries have already begun feasibility studies for independent upgrades to comply with Euro V specifications, maximise production of MS and diesel, and minimise production of furnace oil (FO).



Presently, Pakistan’s capacity for petrol, diesel, and furnace oil is 10,702 tonnes/day, 21,237 tonnes/day, and 15,417 tonnes/day, respectively.

In late January, Pakistan Refinery Limited (PRL) initiated a refinery expansion and upgrade project (REUP) at an estimated cost of $1.7 billion. The project aims to double its installed crude processing capacity to 100,000 barrels per day, boosting the production of high-margin products and low-sulphur fuel, including Euro-V petrol and diesel. The project is set to be completed by the end of 2028.

Explaining the investment source ($1.7 billion), PRL MD/CEO Zahid Mir stated in January that 25% of financing would be provided by the government, while the refinery would arrange $200 million annually by exporting furnace oil. The government collects a 10% duty on petroleum product sales and deposits it in an Escrow account, with funds available for refinery upgrade projects.

AHL anticipates “Attock Refinery Limited to opt for the upgradation agreement soon,” citing ATRL’s strong balance sheet and massive cash position of Rs66 billion (Rs616/share) with no debt.

The upgradation policy imposes a minimum 10% customs duty on imported MS and diesel for seven years, with any excess directed to the Inland Freight Equalisation Margin (IFEM) pool. Refineries ineligible for policy incentives must deposit the excess customs duty in IFEM. Additionally, customs duty on crude oil will be reimbursed to refineries via IFEM.

The policy grants refineries a 10% tariff protection/deemed duty on the ex-refinery price of MS and diesel for seven years. After this period, a 7.5% deemed duty on High-Speed Diesel (HSD) will persist for 20 years or until deregulation, whichever comes first.

Refineries importing used Plant, Machinery, and Equipment (PME) for upgradation can withdraw a maximum of 24.5% of the total project cost from the escrow account. Eligible refineries importing new PME can withdraw up to 27.5% of the total project cost from the escrow account.

Refineries eligible for fiscal incentives in this policy must enter into a legally binding upgrade agreement with OGRA within sixty (60) days following the notification of amendments to this policy. Upon executing the Upgrade Agreement, OGRA will grant a waiver to the respective refinery, allowing it to produce and market non-complying Euro-V specifications until the agreed completion date of the upgradation project, set within six years after signing the agreement.

 

[Ghazi52]

The White Oil Pipeline Project ..

Stakeholders for Pakistan’s energy infrastructure, have reached an agreement to begin construction on the White Oil Pipeline Project, with the support of the Special Investment Facilitation Council (SIFC).

The project, spanning 477 kilometres, will link key locations in Pakistan, including Machike, Thalian, and TaruJabba, and is set to enhance the country’s oil distribution system.

The White Oil Pipeline Project is a flagship initiative led by the Pakistan State Oil (PSO), PARCO, and the Inter-State Gas System, with Frontier Works Organisation FWO overseeing the construction.

Running parallel to the Motorway, this two-part pipeline will connect the Attock Refinery with key sites like Chak Pirana and Faqirabad, ensuring smoother and more efficient oil transport across the region.

 

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“Pakistan Refinery Limited (PRL) has signed pivotal license agreements with renowned industry leaders Honeywell UOP and Axens, for its ambitious REUP,” read the notice.

“Our partnership with Honeywell UOP and Axens marks a significant milestone in our journey towards refinery modernization,” said Zahid Mir, Managing Director and CEO of PRL.

“We believe that these collaborations will play a crucial role in shaping the future of Pakistan’s energy landscape,” he added.

Doubling capacity

The company shared that the REUP project aims to double PRL’s refining capacity from the current 50kbpd (thousand barrels per day) to 100kbpd and upgrade the existing configuration from hydro skimming to a deep conversion refinery.

PRL said that the conversion would enable it to produce value-added products and Euro V-compliant (European emission standards) fuels that are environmentally preferable to legacy automotive fuels.

“PRL has selected state-of-the-art process technologies from these global technology providers,” it said.

Honeywell UOP has been selected for bottom-of-the-barrel conversion technology and naphtha processing.

This includes the Residue Fluidized Catalytic Cracking Process, the LPG Merox process, and a naphtha complex, featuring a naphtha hydrotreater and a CCR (continuous catalyst regeneration) platforming unit.

Meanwhile, Axens has been chosen to supply Prime G+®, Prime D™, and Polynaphtha™ to achieve Euro V gasoline and diesel specifications, added the statement.

Last week, PRL executed an upgrade agreement with the Oil & Gas Regulatory Authority (OGRA).

This was done in accordance with the mandatory provisions outlined in the Pakistan Oil Refining Policy for the Upgradation of Existing/Brownfield Refineries, 2023.

 

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About Cnergyico​

Cnergyico is one of the Pakistan’s leading petroleum company engaged in the businesses of oil refining, petroleum marketing, and petroleum logistics, headquartered in Karachi.

Cnergyico Pk Limited is Pakistan’s largest refinery by capacity, having the nation’s highest refining capacity of 156,000 barrels per day. Cnergyico produces a wide range of refined petroleum products, including LPG, Motor Gasoline, Kerosene, Jet Fuel, High-speed Diesel, and Furnace Oil. The company’s vision is to achieve sustainable productivity and deliver shareholder return while upholding high environmental, health, and safety standards.

We take pride in having the largest capacity crude oil storage tanks in the country. Our petroleum distribution network facilitates the movement of petroleum products around the country, providing greater economies of scale. Today Cnergyico has more than 473 retail outlets nationwide and is growing by 35-40 outlets annually.

Cnergyico is Pakistan’s largest vertically integrated oil refining company, that fulfils the nation’s energy requirements and propels the country’s progress. We are using state-of-the-art equipment, advanced technology, and an innovative approach to produce energy products in a sustainable and environmentally friendly way.

We own and operate high-quality energy assets that hold strategic importance in the country’s energy landscape, including Pakistan’s largest oil refinery in terms of nameplate capacity (i.e. 156,000 barrels of oil per day), a vast and rapidly growing network of retail outlets, Pakistan’s first and only Single Point Mooring facility, and the largest crude oil storage tanks in Pakistan.

Through our transformation plan, we are enhancing and expanding our core oil refining and marketing assets, solidifying our petrochemical capabilities, and looking for diversification opportunities. We seek to play a bigger role in meeting Pakistan’s future energy needs in a sustainable manner.

Our diverse and highly skilled workforce consists of approximately 800 dedicated employees shared among our companies.


Bosicor as Public Limited Company

Bosicor is incorporated in Pakistan as a public limited company on 9 January 1995

Bosicor starts its commercial production on 1 July 2004, refining crude oil into various saleable components

BPPL launches of its first retail outlet in July 2007 near Sukkur

BPPL commences the construction of its second refinery, ORC-2, with a capacity of 120,000 bpd

BPPL builds the largest capacity storage tanks in Pakistan at the Mouza Kund facility with a storage capacity of 44,000 metric tons

Byco Petroleum Pakistan Limited is renamed Cnergyico Pk Limited (CPL)

 

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