Barrel along: After a decade, Pakistan resumes crude oil export

[VCheng]

Isn't it time to plan either expansion of existing refineries or installing new ones? @niaz sb?

Modern refineries need much larger than the volumes Pakistan has available to make them cost-effective. It is cheaper for Pakistan to export its excess crude and import the refined products it needs rather than invest in more refining capacity.

 

[niaz]

We must understand that very few refineries ( Attock oil is one) are such where all the production is consumed within the country. Some products are always surplus and need to be exported. Therefore products from the refinery must meet international specifications for it to be viable. Additionally, National exchequer will have to pay for imported crude, pay for the expense of refining and also a reasonable return on investment. If the end product turns out to be more expensive than import, why set up a refinery at all?

In order to compete with the refineries already working or coming up in the Gulf Countries, one requires a 400,000 bbl. per day capacity with a Coker, so that fuel oil production is zero. Most recent one that came on stream earlier this year is Satorp (Saudi Aramco Total Refinery & Petrochemical Company) cost $10-billion and took about 5 years to complete. Ownership is 62.5% Saudi & 37.5% Total France. The cost was a bit more because it also has an Aromatics plant. Nevertheless even a normal state of the art refinery will cost upward of $5-billion.

I am not saying that it cannot be done. Reliance as well as Essar, located about 350 miles east of Karachi have done it. Reliance refinery at Jamnagar cost $12-billion to construct in two stages and is of 1.2-million barrels per day capacity. Recent expansion of Essar Refinery at Vadinar; next door to Reliance; from 200 to 400,000 bbl. per day cost $2.2-billion with total investment at $5-billion. This was despite the fact that many items were constructed in India. Is there any one in Pakistan willing to put up that kind of money?

100,000 bbl per day certainly does not represent economy scale hence a non-starter. Do we want another Bosicor? There is no point installing new refining capacity if the produce from it will be more expensive than the import. If it is based on Iranian crude, even if it is refined in Pakistan, sanctions will apply, thus argument of by passing the sanctions is false.

In my humble opinion, ulness we have indigenous crude, any refinery which is not state of the art makes no economic sense.

 

[niaz]

Actually i still remember a source from the past claiming upto 40bn Barrel of offshore oil reserves.

anyway the estimate of 270million barrel is way too low for a geography of Pakistan.Even Afghanistan has close to 4Billion barrel proven oil reserves with some source's even claiming 11Billion barrel of oil reserves.

There has not been sufficient drilling activity in Afghanistan and most of the data about mineral & petroleum resources Afghanistan is guess work.

Information issued by Afghanistan government suggests 1.6-billion barrels of oil & 16 TCF of gas.

Oil and Gas Resources - Ministry of Mines

Potential is one thing and actual discoveries another. You cannot plan your economy on potential alone. I grew up with potential reserves of 50-billion barrels of oil but thus far total discoveries of oil in Pakistan since her birth have been about 1-billion barrels. A lot of it has been consumed and only about 300-million proven reserves still in the ground.

One should never lose hope; but in my humble opinion probability of finding major oil reserves (5-billion barrels or more) in Pakistan is small. It is however possible to double natural gas reserves and if we double our gas production, condensate production will also double.

For the record largest exporters of Condensates are Qatar & Iran. Each exporting on the average 450,000 bbl. per day of condensate.

US through extensive shale gas production is now the largest condensate producer in the world which is expected to reach 4-million barrels per day in the next couple of years.


For the general information, API Gravity is an artificial formula developed by American Institute of Petroleum to classify crude oils and to a large extent it reflects amount of light hydrocarbons in the crude. Higher the API, lighter the density. API of water is 10.

Light crudes have API of around 33 (0.865 density) to 36 degrees. Ultra-light crude such as Algerian Sahar Blend has API gravity of 45 (0.8013 density)

Medium crudes API ranges between 26 (0.8979 density) & 30. Heavy crudes normally have API of 24 (0.9095 density) or less.

Condensates on the other hand have API in excess of 50 (density 0.7793 or less). Therefore one should not confuse Condensate with Crude oils.

 

[VelocuR]

quote= @Aeronaut, post: 6096179, member: 15719"]@Chak Bamu

Iranian proposal to install a 100,000 BL refinery is being blocked by __Nawaz Sharif______ after a 'gift' came from ___Saudi Arabia - World's Number One Terrorist exporter and ISIS______.

right?

 

[Contrarian]

I am not saying that it cannot be done. Reliance as well as Essar, located about 350 miles east of Karachi have done it. Reliance refinery at Jamnagar cost $12-billion to construct in two stages and is of 1.2-million barrels per day capacity. Recent expansion of Essar Refinery at Vadinar; next door to Reliance; from 200 to 400,000 bbl. per day cost $2.2-billion with total investment at $5-billion. This was despite the fact that many items were constructed in India. Is there any one in Pakistan willing to put up that kind of money?

Reliance I believe operates the Worlds largest Refinery.

And they are building another refinery at their Jamnagar complex @niaz
Today article:
Reliance plans $13 billion projects, including new refinery - The Economic Times

 

[niaz]

Reliance I believe operates the Worlds largest Refinery.

And they are building another refinery at their Jamnagar complex @niaz
Today article:
Reliance plans $13 billion projects, including new refinery - The Economic Times

Yes, Reliance Industries Ltd (RIL) refinery at Jamnagar at 1.2-million barrels per day is the largest in the world and state of the art.

Normally I get the info from the literature when international tenders are floated. This project may have been discussed in the RIL board room but thus far I haven’t come across any confirmed news.

 

[Samlee]

Condensate is not crude oil. In the industry condensates are called NGL i.e. Natural Gas Liquids. All natural gas field have some liquid (mostly pentane with a little hexane & heavier hydrocarbons) as bye product.

.

Sir What Is The Difference Between These Condensates Called Natural Gas Liquids and Synthetic Petroleum Fuels Made From Natural Gas?????

 

[haviZsultan]

Do we actually even have enough for ourselves?

 

[C130]

Freedom eagles coming soon

Back to the main point:

That totals 235,200,000.00 USD x 101.010 PKR = 23,757,552,502.44 PKR (23.75 Billion rupees) for one month as per below calculaiton

98,000 barrels per day x 80 USD (conservative price, as current price is over USD 100.00) = USD 7,840,000.00 per day

USD 7,840,000.00 per day x 30 days = USD 235,200,000.00

235,200,000.00 USD x 101.010 PKR = 23,757,552,502.44 PKR (23.75 Billion rupees) for one month

where is this being "invested". You know what i mean?

you aren't exporting 98,000 barrels you are consuming nearly 65,000 leaving 25,000 for export so really it's $60,000,000 a month at $80 dollar a barrel.

 

[AZADPAKISTAN2009]

Should the excess not be stored in underground repositories , for war and other needs when prices go up ? Why sell something we always end up importing from outside

 

[ziaulislam]

Should the excess not be stored in underground repositories , for war and other needs when prices go up ? Why sell something we always end up importing from outside

there is no excess but shortage of refineries..!!!!!!!!!!!!!, its like we need 300,000 clean barrel we produce 100,000 but clean only 70,000, so we export uncleaned 30,000 at cheaper price and import 200.000 clean at much expensive price

point is that we sell raw oil outside to import finish oil..this pathetic, as building a refinery is not difficult. its another field just ignored by stupid government as steel industry is. it is similar to other stupidity like using diseal in goveremnt plants instead of furnace oil or imported LNG
the list of current govt stupidity is even more than previous goverment and to be honest it is very surprising, i was expecting much better performance from them

do you know that india exports of oil products is more than total export of pakistan...!! even though they are world largest oil importer..poor planning, poor incentives and mismanagement by all previous governments including super PML N