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Oil, Gas and Refinery Projects update


Mar 21, 2007
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Russian consortium agrees to set up refinery in K-P


ISLAMABAD: Russian investors representing Inter Rao Engineering and Himmash Apparat, a leading engineering, procurement and construction contractor, through local partner Orpheus have joined hands with Khyber-Pakhtunkhwa Oil and Gas Company Limited (KPOGCL) and they plan to set up a medium-sized refinery in Kohat district.

Considering the crude and condensate production in Khyber-Pakhtunkhwa, which is a leading player amongst other provinces, investors showed keen interest and signed a memorandum of understanding (MoU) for the refinery project in an attempt to ramp up oil production in the province.

According to a statement, a meeting was held between KPOGCL Chief Executive Officer Raziuddin Razi and the visiting delegation of Russian investors, headed by Yaroslav Gavrylendo, Adviser to CEO Inter Rao Engineering and Narovlyanski Alexander, Head of Export of Himmash Apparat, to discuss the way forward for the planned project. The CEO of KPOGCL, which is actively facilitating investments in the oil and gas sector, briefed investors on financial and technical aspects of the project.

“K-P government is fulfilling its responsibility by providing investors with a one-window shop facility and assuring the visiting delegation of full cooperation,” said the statement.

“Letters of Intent have already been issued by the Russian investors through their consortium to the K-P government and they are keen to take this project into the next phase.”

KPOGCL said it was taking all necessary steps for enabling the vision of K-P government to ensure energy security for Pakistan.

According to terms of the MoU, the interested group will undertake a detailed feasibility study for the project. KPOGCL also arranged a site visit for the Russian delegation in Kohat district and showed the potential site for setting up the crude and condensate refinery.

The delegation, while praising efforts of KPOGCL for facilitating new investors, assured it that they would push ahead with the project subject to its approval from Russia.
Ministry invites E&P companies to tap shale gas, oil potential

ISLAMABAD (APP): Ministry of Petroleum and Natural Resources has invited local and international Exploration and Production (E&P) companies to tap massive Shale gas and oil reserves identified in a study carried out in collaboration with USAID. Accordingly, the Ministry has established a Shale gas and oil centre to facilitate interested companies in knocking the recently compassed 188 TCF gas and 58 BSTB oil technically recoverable resources in lower and middle Indus Basin. "A dedicated Shale gas and oil centre has been established at the Petroleum House, which is now open for all interested E&P companies," official sources told APP. They termed the identification of massive Shale reserves a 'game-changer' and future source for abundant supply of petroleum in the country. A study, completed in collaboration with USAID, had confirmed presence of 3,778 trillion cubic feet (TCF) Shale gas and 2,323 billions of stock tank barrels (BSTB) Shale oil in place resources.

The study covered lower and middle Indus Basin which geographically spread over Sindh, southern parts of Punjab and eastern parts of Balochistan. Total area under the study was 271,700 kilometers, which is 33 per cent of total sedimentary area of the country.

Answering a question, the sources said a consortium of Oil and Gas Development Company Limited (OGDCL) and Pakistan Petroleum Limited (PPL) is being formed to undertake pilot project(s) to determine cost of extracting Shale gas and oil.

During the study, a detailed analysis of 124 wells was carried out including laboratory analysis on Shale Cores and Cuttings in the United States.

Objectives of the study were to validate Shale gas resource, estimate initial findings, assess availability of required technology and infrastructure for Shale gas operations and formulate guidelines for the Shale gas policy. The study had further confirmed that basic technology required for Shale gas exploration i.e. horizontal drilling and hydraulic fracturing, was available in the country and being used for conventional and tight gas reservoirs.
China invited to set up oil refinery near Lahore

Opening the doors for Chinese investors with lucrative incentives, Pakistan has offered Beijing to invest in setting up a mid-country deep-conversion refinery and laying a gas pipeline from Karachi to Lahore for the transmission of imported liquefied natural gas (LNG) to consumers in Punjab province.

The offer was made during a recent visit of a Chinese delegation, headed by Nur Bekri, Administrator of National Energy Administration. During a meeting, the Pakistani side requested China to set up oil and gas sub-group under the Energy Working Group for facilitating production and supply projects. Consequently, they agreed to establish the sub-group and assess investment opportunities in the oil and gas projects.

The Chinese government is working with Pakistan under the China-Pakistan Economic Corridor (CPEC) programme, but there are no oil and gas production and supply projects.

According to the sources, the representatives of the Ministry of Petroleum and Natural Resources told the visiting delegation that the ministry was ready to work with Chinese companies in a bid to develop oil and gas infrastructure projects on a commercial basis.

Pakistan offered China to pour money into setting up a mid-country deep-conversion refinery near Lahore with the production capacity of 250,000 barrels per day (bpd).

Separately, the government has started work on a 250,000 bpd deep-conversion refinery, which will be developed in a joint venture arrangement with Abu Dhabi in Karachi. Pakistan needs another refinery of 250,000 bpd in the mid-country near Lahore.

At present, five hydro-skimming refineries are working in the country and they annually produce only 13 million tons of petroleum products. The remaining demand is met through imports after tenders are floated by Pakistan State Oil and private sector oil marketing companies.
China to invest $4 billion in Pakistan to develop petrochemical complex

China is planning to construct a USD four billion petrochemical complex, that envisions a refinery with 10 million tonnes per year capacity near Pakistan's southern port city of Karachi, industry officials said.

This was disclosed by Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Zubair M. Tufail after a meeting with the visiting Chinese delegation led by Li-Jial, Director Tianchen Engineering Corporation (TCC), at the Federation House here on Wednesday.

Li-Jial and Tufail agreed in principle to establish and exchange investment missions to further enhance trade relations between the two countries, Dawn reported.

A Chinese proposal to set up a refinery along with a downstream petrochemical complex near Karachi is advancing steadily as requests for 500-1,000 acres (land) has been submitted to the provincial governments of Sindh and Balochistan, the report said.

The estimated cost of the project is about USD 4 billion, it said.

The complex envisions a number of jetties, a refinery with 10 million tonnes per year capacity, as well as downstream processing facilities for naphtha and its component chemicals.

"Currently we are importing USD 2 billion worth of these chemicals from the Middle East," Tufail said, adding that the complex could help reduce Pakistan's external deficit.

Building of the complex will take four to five years, he said.

Li-Jial said that TCC would like to invest in Pakistan to enhance business opportunities.

China, the "all-weather" friend of Pakistan, had been extending cooperation in different sectors of the country's economy and lately there had been a "sudden jump" in these relations for the mutual benefit of both countries, she added.

China is currently building the China-Pakistan Economic Corridor (CPEC) a part of Chinese President Xi Jinping's ambitious multi-billion Belt and Road initiative.

The USD 50 billion project is a mega network of roads, rail links, power plants and other infrastructure connecting western China's Xinjiang province to Pakistan's southern port of Gwadar.

The FPCCI president said that Pakistan could benefit from the TCC's vast experience in oil refinery, energy, chemical complexes and other projects and explore investment opportunities mutually beneficial to both the countries.

Tufail said both the provincial governments are interested in this project but would depend how they make a land deal with the Chinese investors.

ISLAMABAD: Ministry of Petroleum and Natural Resources has invited local and international Exploration and Production (E&P) companies to tap massive Shale gas and oil reserves identified in a study carried out in collaboration with USAID.

China plans to build Petrochemical Complex near Karachi with 4 Billion Dollars.
KARACHI: A Chinese proposal to set up a refinery along with a downstream petrochemical complex near Karachi is advancing steadily as requests for 500-1,000 acres has been submitted to the provincial governments of Sindh and Balochistan.
The estimated cost of the project is about $4 billion.
The complex envisions a number of jetties, a refinery with 10 million tonnes per year capacity, as well as downstream processing facilities for naphtha and its component chemicals. “Currently we are importing $ 2 bn worth of these chemicals from the Middle East”
Polish company to drill 14 oil, gas wells in potential areas

A Polish oil and gas company, PGNiG, would drill 14 exploration wells in hydrocarbon potential areas during the current year. “The company has planned to step up its exploration and production activities and take the business volume to Rs 100 billion per year,” officials in the company told APP.
They said the company, operating in Pakistan since 1997, would play an important role in meeting Pakistan’s growing energy needs.

Before acquiring the current Kirthar Concession (Block 2667- 7) lies in Dadu district of Sindh, they said, the company operated and carried out exploration activities in four other Concessions namely Khanpur West,Sabzal, Mekhtar and Sabzal South. The Kirthar area and Lasbella in Balochistan zone-III.

They said Rehman Gas Field was discovered in the Kirthar Block in 2009 which started production in 2013. “This was the first- ever gas produced from a “Tight Gas” reservoir in Pakistan,” they claimed.

In 2015, the officials said, the company discovered the Rizq Gas field which was the second Tight Gas Field in Kirthar Block and commissioned the Rehman Production Facility with a capacity of processing up to 40 million standard cubic feet of gas per day (mmscfd) gas.

“PGNiG doubled its production from the Kirthar block when gas from Rizq Gas Field was added to the national grid in November 2016, which helped to reduce the increasing demand-supply gas for natural gas in the country,” they remarked.

Two more development wells have been planned at the already mature Rehman Gas field, an appraisal well on the new Rizq gas Field and an exploratory well to test a potential prospect in the northern side of the block.
They said the company has so far invested more than 125 million dollars in Pakistan, adding that current daily production from the Rehman field stood at 24 mmscfd from four producing wells, which would be increased up to 90 mmscfd gas with full field development.

The officials said the increase in production requires advanced technologies (horizontal wells, multiple transverse hydraulic fracturing, etc) for which an investment of more than $ 300 million would be made.
“PGNiG is in active pursuit to increase its footprint in the Pakistani’s upstream oil and gas sector and is also interested to develop the shale gas deposits here,”

China’s GEDI wins $3.58bn EPC contract for Falcon Oil refinery in Pakistan

Pakistani conglomerate WAKGROUP has awarded a contract worth $3.58bn to China-based Guangdong Electrical Design Institute (GEDI) to build a new deep conversion oil refinery in the Khyber Pakhtunkhwa province.

The contract given for GEDI, a subsidiary of China Energy Engineering Corporation (CEEC), is for engineering, procurement and construction (EPC) of the Falcon Oil refinery project.

According to the parties, the Falcon Oil refinery, which will be built in Dera Ismail Khan, will have a production capacity of up to 100,000 barrels per day of oil.

The objective of the Falcon Oil refinery will be to process 90% of the imported crude oil via Karachi with 10% local crude oil sourced from various oil wells in Karak district. The subsequent petroleum products produced from the full conversion process will be mainly for sale by complying with the mandated EURO-II specifications.

WAKGROUP chairman Waqar Ahmed Khan said: “This new state-of-the-art oil refining complex will have its independent 100-Mega Watt power generation plant, 3.8 million metric tons storage facilities all across Pakistan and 300 plus kilometers network of oil pipe lines.”

The Pakistani oil refinery is likely to be completed in 30 months after commencement of the project work.

It will feature a crude distillation unit, a naphtha hydrotreater unit, a reformer unit, an isomerization plant, a thermal gas oil unit, an effluent treatment plant and all auxiliary units.

CEEC vice president Yu Gang said: “As the strong backup for GEDI, CEEC is willing to provide convenience and support while at the same time implement supervision and provide guidance.

“CEEC and GEDI will insist on the scientific, high efficient, concise and modest philosophy to utilize resources, make technical planning and solution and strictly execute the contract to build the project into a demonstration of China-Pakistan cooperation."


China to build Asia’s largest oil refinery in Pakistan


Pakistan and China have agreed to build an oil refinery in Dera Ismail Khan WAK group from Pakistan and Guangdong Electrical Design Institute from China have signed an agreement in this connection in Dubai.

Under the agreement, Asia's largest oil refinery will be established at Yarak area of D.I.Khan in two and a half years at a cost of around 400 billion rupees.
The project will have capacity to refine 100,000 barrels of oil per day.



Commissioned in the year 2000 and built at a cost of US$ 886 million, PARCO Mid-Country Refinery (MCR) at Mahmoodkot near Multan has added 4.5 million tons per annum (100,000 BPD) to the country’s refining capacity. MCR was one of only five refineries built in the world at the beginning of the millennium and, therefore, can be called the latest in terms of generations.

PARCO’s Mid-Country Refinery (MCR) is the country’s most modern and largest operating refinery and employs critical processes involved in refining. The Refinery produces Liquefied Petroleum Gas (LPG), High Octane Blending Component (HOBC), Kerosene, Jet Fuel (JP-1 & JP-4), High Speed Diesel (HSD), Light Speed Diesel (LDO), Furnace Oil (FO) and Sulphur. These products are being delivered to customers through Gantry Operation at MCR as well as via PARCO’s Mahmoodkot-Faisalabad-Machike (MFM) Pipeline System. MCR is capable of producing lead free Motor Gasoline of 90 Octane. . It produces fuel oil with low sulphur content meeting the international standards and has a Sulphur Recovery Unit with tail gas treatment to avoid pollution.

The Refinery has a refining capacity of 100,000 BPD of a mixed Arabian Light/Upper Zakum/Murban/Das and Indigenous Crude slate, which is transported to the Refinery site by PARCO’s existing pipeline System from Karachi. MCR being a grassroots Refinery, has both primary and secondary processing facilities and supporting infrastructure, which allows the process units to operate in an efficient manner in order to produce the desired slate of products in an economic and flexible manner.
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Pak-Arab Refinery Limited (PARCO), an integrated energy company, is a Joint Venture between Pakistan and the Emirate of Abu Dhabi. PARCO owns and operates over 2000 kms of pipeline network, Pakistan’s largest and most modern refinery, marketing, distribution operations and has formed Joint Ventures with renowned international companies and conglomerates. The Company is continually following an aggressive growth strategy and has planned expansions and penetration into new ventures and markets.

Mr. Shahid Khaqan Abbasi and Secretary Petroleum & Natural Resources, Mr. Arshad Mirza, visited PARCO Coastal Refinery (PCR) site in Hub, Baluchistan, 70 km from Karachi .

While briefing the press about the project, Minister stated that this project will have a refining capacity of 250,000 BPD and will also involve construction of storage, pipelines, marine terminal and development of allied infrastructure. The project is expected to be completed by 2022. The project will bridge the gap in the demand and supply of refined products, which at present is approximately 13 million metric tons per annum and is likely to increase further due to economic growth.
KPOGCL joins hands with US firm to enhance oil production


ISLAMABAD - Eying on the target of the production of 2 million barrel oil per day, by 2025, the Khyber Pakhtunkhwa Oil and Gas Company Limited (KPOGCL) on Wednesday signed a Memorandum of Understanding (MoU) with the American Halliburton company.

Under the MoU, American Halliburton company would train the KPOGCL workforce and provide it with latest technology software and introduce technology in exploration and production of oil and gas in the province, KPOGCL CEO Raziuddin told media persons here after signing the MoU with Ahmed Kenawi, the senior vice president of Middle East and North America of the Halliburton company.

Halliburton will also train local manpower on latest software and provide on-job training to bring them at par with international standards. “The Halliburton is one of the World’s biggest services companies and its’ come back to Pakistan, especially to Khyber Pakhtunkhwa is a sign of investors’ increased interest and confidence in the country’s improving security and business environment,” Raziuddin said. He said that this company had worked in Pakistan earlier as well and its’ return to Pakistan will send a positive message to other companies who had left the country over last several years, he added.

“We are targeting to achieve crude oil production of two million barrels per day by 2025 which is currently 51,000 barrels a day (53pc of country’s total oil production) which was only 30,000 barrels four-year back,” the KPOGCL CEO said.

“Similarly, natural gas production has been targeted at 2,000 million cubic feet/day (mcfd) by 2025 which is currently at 430 mcfd and three year back it was 330mcfd. He further said that liquefied petroleum gas (LPG) production was only 10 tons/day and now it has been raised to 550 tons/day and by 2025, we are targeting to increase its production to 3,000 tons a day,” he maintained.

Razziuding said that out of 28 active rigs in Pakistan, 11 are working in KP. Estimates show that KP has recoverable reserves of 16 trillion cubic feet of natural gas and more than 1.1 billion barrels of oil. The province has high success rate of drilling, as among each 2.8 wells dug for the oil or gas, one well is successful, whereas world average is one out of ten wells, he claimed.

The KPOGCL chief executive further said that with more and more investment in the sector, it would also bring industrialisation in the province including setting up of fertilisers plants, refineries and other relevant industries that will ultimately help create more jobs, boost provincial and country’s overall economy, reduce dependence on imported oil and save hard-earned foreign exchange. The increased production will also help in social uplift of the province, by allocating more and more royalties for health and education and other uplift schemes, he added.

On the occasion, Halliburton Senior Vice President Ahmed Kenawi, said, “It is pleasure to sign MoU with the KPOGCL under which we will be training the workforce and transfer advanced technology.
PM Abbasi inaugurated the country’s second Liquefied Natural Gas (LNG) terminal at Port Qasim in Karachi .
The PM noted that the new terminal had been constructed in just 330 days.
Its third LNG terminal at Port Qasim will become operational in 2018, taking the total installed capacity close to 2,000 million cubic feet per day.


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