Oil, Gas and Refinery Projects update

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Gas shortfall in winter:​

The Sui Northern Gas Pipeline Limited (SNGPL) on Monday said that it will distribute 100,000 Liquefied Petroleum Gas (LPG) amid an expected gas shortage in the upcoming winter.

The gas distribution company, in a notice to the Pakistan Stock Exchange (PSX), said that in view of potential gas shortfall in the forthcoming winter, the Ministry of Energy (Petroleum Division) has advised to explore all possible options to meet the energy needs of consumers, including supplying LPG cylinders.

“Accordingly, the Board of Directors of SNGPL in their meeting dated September 28, 2022, has approved the project of LPG distribution with 100,000 cylinders,” read the notice.

SNGPL informed that the estimated initial investment for the said venture is up to Rs1,200 million.

“The return on investment is not subject to the present Return on Assets (ROA) regime and will be determined as per market dynamics,” the company said.

Earlier, trade bodies including the Businessmen Group (BMG) and Karachi Chamber of Commerce and Industry (KCCI) proposed Prime Minister Muhammad Shehbaz Sharif to summon an emergency meeting on top priority to extensively discuss the overall gas demand/ supply situation in addition to exploring ways and means of how to efficiently deal with gas shortages during this year’s winter season.

In the letter, they said that the winter season this year is expected to be harsher due to the after-effects of climate change, which would require an extraordinary plan of action for dealing with the anticipated gas crisis but unfortunately, no measures have been taken so far.

The bodies said that there had been continuous supply shortfall of gas in the year 2021 when the general industries of Karachi faced around 12 hours of load shedding which started on 1st January 2021 till December 2021 and the gas supply during last three months, i.e. October, November and December, was dreadful.

Gas shortage has become a massive issue in Pakistan, with the situation worsening especially during the winter months, as demand for heating rises, affecting both households and industries.

 

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https://twitter.com/x/status/1577020743698640896

https://twitter.com/x/status/1576924302439763969

https://www.paklng.com/LNG/T56/FinEval_T56.pdf

https://twitter.com/x/status/1577102909119963138

Pakistan Fails to Secure LNG Deal in Latest Hit to Fuel Supply

Pakistan’s acute energy shortage is at risk of lasting years after the government was unable to secure a long-term supply of liquefied natural gas.

www.bloomberg.com

Pakistan Faces Years of Fuel Shortages After Gas Tender Flop​

• No one participated in tender to buy LNG for 6 years from 2023
• There is little spare LNG supply available until 2026: traders

The cash-strapped nation has grappled with widespread blackouts this year after several failed attempts to buy LNG from the expensive spot market. Photographer: Asim Hafeez/Bloomberg

By
Stephen Stapczynski
October 3, 2022 at 5:03 PM GMT+5 Updated on October 4, 2022 at 6:12 AM GMT+5

Pakistan’s acute energy shortage is at risk of lasting years after the government was unable to secure a long-term supply of liquefied natural gas.

Not one supplier responded to Pakistan LNG Ltd.’s tender to buy the power-plant fuel for between four to six years starting January, said traders with knowledge of the matter. The tender, which closed Monday, was seeking to procure one cargo of LNG each month.

The cash-strapped nation has been hit with widespread blackouts this year after several failed attempts to buy gas from the expensive spot market. It tried to get a long-term deal looking for more reasonable prices, but that hasn’t materialized.

There’s little LNG supply available until 2026 when massive new export projects start up, according to traders. Many spot cargoes are currently going to Europe, where buyers are willing to pay high prices in the rush to secure gas to replace dwindling Russian pipeline flows. That’s leaving developing nations facing energy shortages and economic uncertainty for years.

The latest blow comes at a difficult time for Pakistan, which is already struggling with high inflation and falling currency reserves. Some LNG suppliers are hesitant to sell fuel to the nation out of fear it may not be able to make future payments, according to traders.

Pakistan’s gas distributor Sui Northern Gas Pipelines Ltd. plans to supply 100,000 LPG cylinders to consumers to deal with a potential gas shortfall this winter, it said in a notice to the stock exchange. The company that caters to customers through pipelines in the northern half of the nation has been asked by the government to take steps to meet energy requirements.

PLL fails to attract LNG bids for six-year term contracts

ISLAMABAD: In a huge dent to future LNG supply, Pakistan LNG Limited here on Monday received no response from the LNG suppliers against the revised two-part tender seeking 72 cargoes under 6-year...

www.thenews.com.pk

PLL fails to attract LNG bids for six-year term contracts​

By Khalid Mustafa
October 04, 2022

ISLAMABAD: In a huge dent to future LNG supply, Pakistan LNG Limited (PLL) here on Monday received no response from the LNG suppliers against the revised two-part tender seeking 72 cargoes under 6-year term agreements as LNG is no more available even for term contracts in the international market.

The evaluation report of the results of the two-part tender seeking term contracts uploaded on Monday (October 03, 2022) on PLL’s official website, mentions that no LNG supplier turned up for participating in the bidding process. Under the two-part tender, PLL had sought under part 1, bids for two years from January 2023 to December 2024 seeking 24 LNG cargos but no LNG supplier came up with any bid. The same happened with part 2 of the tender for which PLL sought bids from January 2025 to December 2028 for 48 LNG cargos.

“This is a huge setback for the government as the Pakistan LNG Limited has already failed to procure spot cargos for a long time and the people this time will have to face a massive gas deficit close to over 1-1.5 bcfd,” a senior official close to Secretary petroleum told The News.

The official said that Prime Minister Shehbaz Sharif is known as a doer, but the top functionaries of the Petroleum Division and PLL under his command, as PM also holds a portfolio of federal minister for Petroleum, have failed to import more LNG and resultantly the government will have to rely on the 8 term-cargoes (6 under 13.37 per cent of Brent price and 2 under 10.2 per cent of Brent) and one cargo from ENI at 12.14% of the Brent price. The ENI usually backs out from supplying one cargo in alternate months. “This means that against the capacity to import 12 cargos a month, the government will have to import 8-9 cargoes for winters.” This means Pakistan this time would be importing 800-900 mmcfd gas every month during the winter season against the capacity to import 1,250 mmcfd causing a shortage of 300-450 mmcfd gas.

As far as the local gas is concerned, the gas demand of Sui Southern in Sindh and Balochistan will be hovering at 1200-1300 mmcfd in the winter season, but only 900 mmcfd of gas (850 mmcfd of system gas and 75 mmcf LNG). This means that the gas deficit in Sui Southern system would be around 300-400 mmcfd. However, for Punjab and KPK, the gas deficit in Sui Northern system would rise to 750 mmcfd in January, starting with a shortage of 250 mmcfd in November that will scale up to 600-700 mmcfd in December. The system gas for Punjab and KP will be available to the tune of 790 mmcfd and LNG of 800 mmcfd. From the Mari gas fields, the government is trying to get more gas, ie from 30mmcfd to 110 mmcf to address the shortage.

Apart from the acquisition of term and spot contracts, the government also failed not only to use the under-utilized capacity of 300-400 mmcfd of LNG Terminal-2 but has also not succeeded to use the additional capacity of the same LNG terminal under TPA rules. Had the private sector been allowed to use the excess and under-utilized capacity, the country would have more 400-500 mmcfd LNG in its system and there would have been no gas crisis in the coming winter season “Right now at LNG terminal-2, PLL is unable to fully utilize its own purchase capacity of 600 mmcfd as it has failed to procure 3-4 spot cargos a month. However, it is utilizing 200-300 mmcfd capacity.

A senior official, when asked for reasons behind PLL’s failure to invite LNG suppliers for term bids, said firstly LNG is not available in the international market in the backdrop of the Ukraine crisis and all the LNG producing countries are overcommitted to European countries, China, and Japan. And since they all are rich countries and are able to pay the maximum price of LNG, Pakistan has not received a bid for term contracts.

The second reason, the officials said, is that the country’s LNG sector has become unsustainable. Pakistan State Oil (PSO) is facing a circular debt of Rs327 billion in the LNG sector alone in the wake of the inability of Sui Northern to pay the dues of Rs327 billion. “PSO is feeling the heat as it is finding it difficult to open and retire LCs on time for smooth imports of LNG. More adverse is the case of Pakistan LNG Limited which is also a victim of circular debt of close to Rs100 billion and is unable to open LC for the import of costly LNG cargoes. And on top of that, the current management of PLL has failed to create its clout in the international market despite so many foreign visits by MD Masood Nabi for attending LNG seminars and workshops.

On top of this, the official explained the five-year term contract with GUNVOR expired in July 2022 but the PLL management did not initiate any term agreement with any LNG supplier before the contract with GUNVOR expired. “This is criminal negligence on part of PLL and it should be probed as to why it did not contract more LNG terms agreements before the agreement with GUNVOR expired.”

 

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Mari Petroleum drills first-ever horizontal well in Sindh​

BR

Mari Petroleum Company Limited (MARI), one of Pakistan’s largest integrated petroleum exploration and production companies, has successfully drilled and tested its first-ever horizontal development well Mari 122-H in HRL Reservoir located in Sindh.

“We are pleased to inform you that MARI has successfully drilled and tested its first-ever horizontal development well Mari 122-H in HRL Reservoir of Mari Gas Field in Daharki, Sindh province,” the company shared in a notice to the Pakistan Stock Exchange (PSX) on Wednesday.

Mari is the operator of the Mari Gas Field with 100% working interest.

The company shared that the well was drilled to a total depth of 1,550 meters including a horizontal section of around 530 meters.

“After the acid stimulation job, the well was tested at a rate of around 21 mmscfd of gas at a flowing wellhead pressure of 426 psi."

The company added it is working to put this well into early production and also evaluating the possibility of drilling additional horizontal wells.

Last month, Mari announced a temporary suspension of production operations at its Zarghun South Gas Field and Ziarat Block after flash floods adversely impacted gas pipelines and road infrastructure in Balochistan.

Earlier in June, Mari made a gas/condensate discovery in its exploration well located in North Waziristan, Khyber Pakhtunkhwa.

With a 21% market share, Mari is the second-largest gas producer in Pakistan and has a reserve base of around 600 million BOE (Barrels of Oil Equivalent).

 

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LAHORE: The Sui Northern Gas Pipelines Limited (SNGPL) plans to provide liquefied petroleum gas (LPG) cylinders to those consumers who often face extremely low gas pressure in the tail-end areas during winter.

The company has also identified up to one million such consumers living in several parts of Punjab as eligible for LPG cylinder provision, Dawn has learnt. An official in the petroleum division said a senior officer of the SNGPL has been tasked with carrying out the LPG supply operation.

“As this is being done in the public interest, the LPG would be provided to consumers on a no-profit, no-loss model,” the official added.

The SNGPL covers seven million consumers in Punjab and Khyber Pakhtunkhawa, the majority of them are domestic ones. For many years, the company has been facing a shortage of gas due to depleting indigenous gas reserves and increasing demand.

The company also started importing liquefied natural gas (LNG) from Qatar in a bid to meet the demand of industry, power and other sectors. Due to increasing demand, the LNG share of the total LNG supply has reportedly surged to 55 percent.

The official said before launching the LPG supply operation, the company plans to run an awareness drive for the public at large in print, electronic and social media.

He said there was a plan to provide gas to consumers during cooking hours alone if the gas shortage worsens in a severe winter. He said the company has been asked to ensure gas supplies to industry, especially the export and power sectors.

“The gas supply to the CNG sector is already closed. And it is likely to remain so in coming days,” he said. The official revealed that the LPG supply plan, to date, is in Punjab alone, as there is no gas shortage in KP.

“Under the constitution, the company is liable to ensure full supplies as per the demand of the KP, which is a major gas-producing province,” he clarified.

The company imposed a ban last year on the provision of new gas connections that not only irked consumers but also increased its backlog to around 2.8 million. The company is of the view that while there is no sufficient gas supply, how can it make new connections? The company claims to have given new connections in the last fiscal year in a bid to reduce the backlog. The delay in the finalization of the new gas tariffs for domestic consumers is also a major reason behind the ban.

The reason behind rationalizing gas tariffs for domestic consumers emerged keeping in view the provision of imported LNG after regasification, which costs too much, to consumers at cheaper rates besides providing the system gas (indigenous gas). Eventually, this forced the authorities to work out a new price formula, which has almost been finalized, for domestic consumers.

The backlog of 2.8 million applications for new gas connections also included those seeking gas connections under the urgent category through the deposition of a Rs25,000 fee.

In August last, the company said in a briefing that its regasified liquefied natural gas (RLNG) consumption has reached 55pc of the total supplies due to a massive decline in the indigenous supplies, resulting in more dependence on the RLNG. It also referred to the government’s plan to introduce the weighted average cost of gas, which, the company claimed, would mitigate and reduce the high price of RLNG for the public.

Published in Dawn, October 8th, 2022

 

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Saudi deferred payment facility: Country imports $100m oil in September​

Tahir Amin
October 23, 2022 .


ISLAMABAD: Pakistan imported petroleum products worth $100 million on deferred payment basis under the Saudi oil facility for the seventh consecutive month in September 2022.

Official documents revealed the government has budgeted estimates of $800 million for oil imports under the Saudi oil facility. The country has imported petroleum products worth $300 million in the first three months of the current fiscal year. Saudi Arabia provided petroleum products worth $700 million to Pakistan from March to September. It also provided petroleum products worth $100 million each during March, April, May, June, July, and August 2022.

The Financing Agreement worth $1.2 billion for the import of petroleum products was signed on 29 November 2021 between the Saudi Fund for Development (SFD) and Pakistan’s Economic Affairs Division (EAD).

Under this facility, the Pak-Arab Refinery Limited (PARCO) and the National Refinery Limited (NRL) will import petroleum products up to $100 million per month from Saudi Arabia.

The SFD has extended the financing facility for up to $100 million per month for one year to facilitate the purchase of petroleum products on a deferred payment basis.

According to the official documents, the terms of the financing include the price of purchase by the SFD and a margin of 3.80 per cent per annum. The financing agreement will initially be valid for one year, which may be extended for another year with mutual consent.

Copyright Business Recorder, 2022

 

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The same hue and cry were there in 2019 when KSA promised to make an FDI in Oil Refinery in Pakistan!
Have the KSA fulfilled their 1st Promisss?
Foolish to believe them the 2nd Time!

 

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Govt Manipulating Fuel Prices Will Cost Them Rs. 7.5 Billion: OCAC​

ProPK
Nov 17, 2022

Keeping oil prices unchanged for the second consecutive fortnight could cost the oil industry Rs. 7.55 billion in damages and disrupt fuel supply.

The Oil Companies Advisory Council (OCAC) wrote to the Petroleum Division protesting that this forced stabilization of oil prices at the cost of the industry is not sustainable and will severely impact the already crippled oil industry, knowing very well that based on the government-approved pricing formula, rates were going up.

However, the government, instead of passing on the increase to end consumers or absorbing the impact of the increase by reducing the petrol levy, has reduced the Inland Freight Equalization Margin (IEFM), Exchange Loss Adjustment, and Margins of oil marketing companies (OMCs).

OCAC stated that this rating freeze would cost oil marketing companies Rs. 8.34 on each liter of petrol and Rs. 7.15 on each liter of high-speed diesel (HSD), or a total financial loss of Rs. 7.55 billion.

“The industry is already cing a severe financial crunch due to high global prices, depreciation of the rupee, increased charges on confirmation of letters of credit, high premiums on import, etc, and will not be able to survive if these unfair adjustments are not removed immediately,” it said.

It further added that the Rs. 7.55 billion impact does not include the impact of exchange loss adjustments that have been withheld/staggered by OGRA since August 2022.

The industry liaison argued that forcing oil prices to stabilize at the expense of the industry was unsustainable for it would have a negative impact on the oil industry. The government should have “an urgent meeting with industry members so as to ensure [the] survival of the industry and avoid any supply chain challenges”.

According to the OCAC, the inland freight equalization margin (IFEM) was reduced by Rs. 3.21 and Rs. 2.72 per liter on petrol and HSD, respectively. Similarly, the exchange loss adjustment on petrol and HSD was reduced by Rs. 3.01 and Rs. 2.11, respectively.

While the economic coordination committee (ECC) last month increased OMC’s sales margins to Rs. 6 per liter, OCAC pointed out that the “revised margin for both products has not been incorporated in the prices”, and the industry will not be able to survive if such issues and “unfair adjustments” are not removed immediately.

 

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Power Division Refuses to Buy Furnace Oil From Local Refineries​

The Power Division has refused to lift furnace oil (FO) from local refineries without a workable deferred payment plan.

 

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Sui, Balochistan
The Sui Gas Purification Plant, Sui, Balochistan, 1958 (c).

 

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https://twitter.com/x/status/1593557754576265217

 

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Prospects of oil from Russia: much love lost​

Farhat Ali
December 3, 2022

A delegation led by State Minister for Petroleum Musadik Malik, who wasd accompanied by the officials of Petroleum Ministry and the Pakistan Embassy, held a meeting in Moscow early this week to work out an agreement with Russia on the procurement of Russian oil.

The expectation of the delegation was high and had taken it very much for granted that Pakistan would succeed in inking an agreement on favourable terms similar to those Russia had agreed to for India, which meant seeking a 30 to 40 percent discount on Russian crude oil.

Reportedly, the response of the Russians was against expectations of the delegation; it was rather cold, to say the least. Russia declined to offer its oil to Pakistan, stating that presently all its volumes are sold out and committed. Russia, however, promised to consider Pakistan’s demand later on through diplomatic channels. This promise is more of diplomatic courtesy than anything tangible.


Russia, during the talks is reported to have also pinned down Pakistan on its commitment to the flagship project of Russia-Pakistan Stream Gas Pipeline (PSGP) to be laid between Karachi and Lahore. The Pakistani side during the talks mentioned its desire to change the model of PSGP project.

The Russian side said that the model of the project under G2G arrangement has already been finalised and only some clauses of the shareholding agreement were yet to be given a final shape. Russia is irked by Pakistan’s constant delays on the project and is aware that the issue is diplomatic expediency from Pakistan’s end rather than anything technical or contractual.

It’s a seller’s market in view of upcoming onset of winter in Europe and supply and price volatility in the global energy market. Russia is, therefore, cashing in on this opportunity.

At the very start of the Russia-Ukraine conflict and unprecedented sanctions on Russia by the West, Moscow desperately needed buyers for its oil and empathy/neutrality from nations on the diplomatic front. India immediately grabbed this opportunity with both hands, overriding all criticism from the West.

In the process India signed a long-term oil procurement agreement at some significant concession and once again got on the right side of Russia, much at the expense of Pakistan’s loss on both counts.

Pakistan has missed out on the timing of its outreach to Russia for the procurement of oil and also on exposition of diplomatic neutrality towards Russia when it needed it the most. More than losing out on oil procurement from Russia, it has missed a rare opportunity to balance its relationships with the US and Russia on lines that India is managing so successfully since long.

It is no secret that the incumbent government, so as not to displease USA, avoided procurement of oil from Russia when it was time to do so and when Russia was inclined towards Pakistan. The incumbent government strengthened its spine only when President Biden recently gave a green signal of no objection to nations aspiring to procure Russian oil.

Russian oil at discounted rates would have done much good to the nation’s sinking economy and could have provided the much-needed relief to its people, businesses and industries. This is one example to demonstrate how a nation’s subservience to a superpower shatters the dream of its people to secure a better life for themselves and their offspring.

Copyright Business Recorder, 2022

 

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Govt left red-faced over Russian oil assertions​

State minister Musadik denies FM Bilawal’s claim; says country indeed pursuing ‘discounted’ oil from Moscow

Zafar Bhutta
December 16, 2022

Contradicting his cabinet colleague, Minister of State for Petroleum Dr Musadik Malik on Friday, addressing a news conference in Islamabad, maintained that Pakistan was indeed pursuing Russian oil at discounted rates.

“Russia would export petrol and diesel to Pakistan at the maximum possible discounted prices,” he added.

When asked about the foreign minister’s statement on the Russian energy, Malik said he could not listen to the news conference of Bilawal. However, he hurriedly added that Bilawal had merely said that Pakistan was not receiving energy from Russia.

“We lacked something that we should have given in detail to the Foreign Office,“ Malik said, adding that his ministry would clarify all misperceptions in this connection.

The state minister further said that the Pakistani ambassador in Moscow was also part of the negotiations with Russia on oil import. “This is a technical confusion, which we will address,” he informed the media.

Malik claimed that the visit to Russia had been “very positive” in connection with crude oil imports from that country. “There are eight types of crude oils in Russia, two of which can be refined in Pakistan,” he said.

He added that the Pakistan Refinery Limited (PRL) and Pak-Arab Refinery Company Limited (Parco) had expressed their willingness to refine the Russian crude oil.

He further said Pakistan would import Russian oil at discounted rates and that would reduce the cost of energy in the country. “Lower energy prices will reduce the cost of production, transportation and storage of everything, which will also bring down commodity prices,” he maintained.

A delegation of an inter-governmental commission headed by the Russian energy minister will visit Pakistan in the second week of January to finalise matters related to the import of crude oil, diesel and petrol. “The supply of oil from Russia will start early next year,” Malik said.

The state minister said Azerbaijan was believed to be providing cheaper liquefied natural gas (LNG) and talks were also under way with the UAE for diesel and petrol.

He added that Pakistan would import 1.3 billion cubic feet of gas per day through the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project.

Malik claimed that the government was focusing on the development and prosperity of the country to provide relief to the people and added that the government was trying to buy cheap oil and gas, which was the dream of Prime Minister Shehbaz Sharif to provide facilities to the poor.

He further informed the media that the situation of gas supply in October and November was better than last year. “More gas is being supplied in December than last year,” he claimed.

“More gas will be available in January as well, he said, adding that its production was decreasing at the rate of 10% per year.

He said an additional cargo had been arranged from Qatar to minimise the gas crisis. Apart from this, the Sui Northern Gas Pipelines Limited (SNGPL) has arranged for the supply of liquefied petroleum gas (LPG) to consumers.

As many as 20,000 tonnes of LPG is being procured, and a framework agreement with Azerbaijan in this connection is expected to be signed soon.

There is a possibility of a government-level agreement with Azerbaijan's major company Socar Polymer, which will provide cheaper LNG.

 

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$4.5 billion oil refinery in Gwadar to be discussed today​

By Yasir Habib Khan | Gwadar Pro
Dec 20, 2022

GWADAR, Dec.20 (Gwadar Pro) - In order to materialize the $4.5 b oil refinery project in Gwadar, five-member delegation of Chinese Company “East Sea Group Limited (ESGL)” is visiting Gwadar on December 20 (Tuesday).

ESGL official Jason Zhou told Gwadar Pro that ESGL chief engineer Mr Liu along with other officials will reach Gwadar on December 20. The delegation consisting of technical team with marine engineering, commerce and petroleum professional background will be headed by Group’s General Manager Fang Haixia. Delegation will stay for three or four days in an effort to tune in conceptual and practical frameworks.

They will hold meetings with leadership of China Overseas Ports Holding Company and Gwadar Port Authority to review the proposed site for the establishment of oil refinery in Gwadar Free Zone phase II.

As per initial plan, ESGL will install 5 million tons capacity oil refinery in Gwadar. Later ESGL will upgrade it with annual oil processing capacity of 8 million tons in Gwadar. China Overseas Port Hold Company (COPHCO and ESGL have already mutually developed understanding to make things happen at Gwadar Free Zone phase II.

East Sea Group Limited (ESGL) is a diversified multinational company, mainly engaged in energy trade, energy storage logistics and oil refining, and has invested in many countries such as South America, the Middle East and Indonesia.

Chinese entry came at a time when uncertainty was brewing about fate of oil refinery in Gwadar after international players dragged their feet and went indecisive on the offer of establishing oil refinery in Gwadar. And following Chinese move, many international firms have signaled for interest afresh to develop oil refinery in Gwadar.

Sources in GPA told Gwadar Pro that oil refinery project will be constructed in two phases. The first phase will have an annual refining capacity of 5 million tons. East Sea Group will place at least six crude oil transshipment vessels totaling 2 million tons at Gwadar port in Pakistan every month, starting from and supporting its own oil source business, and will also provide oil transshipment and transshipment services for major Middle East oil producing countries.

According to sources in Ministry of Energy (Petroleum Division), the refinery will provide a substantial storage capacity to Pakistan, enabling it to maintain reserves for longer time and save foreign exchange. The multi-billion dollar project, upon implementation will provide an impetus to further investment in the petrochemical industry in Gwadar.

In order to greenlight the mega project by government of Pakistan, concerned institutions are gearing up to scrutinize the detailed business plan and feasibility study for further processing. For this purpose the services of an international consultant has already been hired and both documents are in the process of preparation. For planning and construction, Oil and Gas Regulatory Authority (OGRA) will fulfil the licensing requirements under OGRA Ordinance 2022.
The move of launching the oil refinery seems to have encouraged other foreign investment that had stalled due to many reasons in the oil refinery sector during recent past.
In January 2019, Saudi Arabia’s Energy Minister Khalid Al-Falih announced that the Arab nation was planning to set up a $10 billion oil refinery in Pakistan’s deep-water port of Gwadar. However, the plan was rolled back. Later it was indicated with vagueness that instead Gwadar, oil refinery may be established somewhere else in Pakistan.

As a bolt from the blue, few days back Saudi Arabia has sprung back into action with signaling renew engagement to come up with oil refinery project in Gwadar amid fresh activism of newly appointed Secretary Petroleum Capt (r) Muhammad Mahmood. On October 27, Federal Minister for Finance and Revenue Senator Mohammad Ishaq Dar also held a virtual meeting on First Joint Economic Sub Committee of the Saudi – Pakistan Supreme Coordination Council with HRH Prince Abdulaziz bin Salman bin Abdulaziz, Minister of Energy Kingdom of Saudi Arabia.

Meanwhile the UAE has also shown willingness to set up a deep-conversion, state-of-the-art refinery that would have an output of 500,000 barrels per day in Hub (a town in Balochistan with Pak-Arab Refinery Limited (PARCO).

Currently, there are five local players operating in the oil refining sector in Pakistan including, Pak-Arab Refinery Limited (PARCO), Attock Refinery Limited (ARL), National Refinery Limited (NRL), Pakistan Refinery Limited (PRL) and Cnergyico Pk Limited (CPL). All of the refineries are hydro skimming refineries, except for PARCO which is a mild-conversion refinery.

Pakistan’s oil refining capacity is about 450,000 barrels per day (bpd), equivalent to 20 million tons per annum. Local refineries have supplied about 60 percent of the country’s requirements of Diesel, 30 percent of Motor Gasoline and 100 percent of Jet fuel for defense. The rest is imported as refined products. Pakistan has been importing significant volumes of petrochemicals, worth more than USD 2 billion annually, as there is no primary petrochemical production facility in Pakistan.

$4.5 billion oil refinery in Gwadar to be discussed today

GWADAR, Dec.20 (Gwadar Pro) - In order to materialize the $4.5 b oil refinery project in Gwadar, fiv

www.gwadarpro.pk

Oil refinery project: Chinese team visits Gwadar

ISLAMABAD: In order to materialise the $4.5 billion oil refinery project in Gwadar, five-member delegation of...

www.brecorder.com

Gwadar: 3 million-ton ship-to-ship oil blending facility in the offing​

By Yasir Habib Khan | Gwadar Pro
Dec 23, 2022

GWADAR, Dec. 23 (Gwadar Pro)-Chinese firm East Sea Group Limited (ESGL) plans to establish a 3 million-ton ship-to-ship (STS) oil blending facility at sea space in connection with a $4.5 billion oil refinery project in Gwadar. After the venture materializes, Pakistan will earn $ 20,000 to $ 40,000 annually.

The 3 million-ton STS oil blending facility will be established solely on the sea surface without any contact or use of the landmass of Gwadar. The rest of the 5 million-ton oil refinery will be on the land of the Gwadar Free Zone Area (phase II). With the 3 million-ton STS oil blending facility in the first phase and the 5 million-ton oil refinery in the second phase, Hong Kong-based Chinese firm East Sea Group Limited will build up an oil refinery with an annual oil processing capacity of 8 million tons.

The mega plan of the STS oil blending facility was discussed at length in the 45th special urgent meeting of GPA board members. The meeting held at GPA head office Gwadar was participated by GPA board members, COPHC chairman, and ESGL officials.

The meeting agreed to designate a specific sea area away from the 38 sq km anchorage area of Gwadar Port for the establishment of the STS oil blending facility. Instead of the northward side, the facility will be on the south side because the northward area has a depth of only 15 meters, while the southward side has a depth that ranges from 35 to 37 meters, which appropriately serves the purpose.

Furthermore, Chairman GPA Pasand Khan Buleidi assured the visiting delegation of East Sea Group Limited of tax facilitation and duty exemptions set forth by all procedural and legal frameworks under Pakistan's transshipment rules.

On the occasion, the ESGL officials committed that the company will buy 30 percent crude oil from the local market of Pakistan as Pakistan boasts 19 million tons of crude oil capacity.

Gwadar: 3 million-ton ship-to-ship oil blending facility in the offing

GWADAR, Dec. 23 (Gwadar Pro)-Chinese firm East Sea Group Limited (ESGL) plans to establish a 3 milli

gwadarpro.pk

 

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Acting on the International Monetary Fund’s (IMF) demand, the federal government jacked up the levy on diesel to Rs35/litre, ARY News reported on Monday, quoting well-placed sources.

The masses have been again deprived of relief from the downing fuel price at the international market as the government jacked up the levy on diesel to Rs2.50 per litre with effect from January 16, 2023.

Meanwhile, the margin of Oil Marketing Companies (OMCs) has been jacked up by Rs1 on petrol, the sources said. The margin of levy on petrol stands unchanged at Rs50/litre.

Under the IMF [International Monetary Fund] agreement, the government seeks Rs855 billion through petroleum development levy in the current fiscal year, 2022-23.

 

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Russian gasoline to be sent to Pakistan as EU import ban looms​

• Forteinvest has sold to a trader an initial 1,000-tonne lot of gasoline from its Orsk plant for delivery to Pakistan and has more requests to supply gasoline, diesel and LPG to the country

Reuters
January 27, 2023

MOSCOW: Independent Russian oil refiner Forteinvest has clinched a deal that will see Russian gasoline sent to Pakistan by land for the first time, two industry sources said on Friday, as Russian refiners seek alternative markets for motor fuels days before an EU import ban.

Forteinvest has sold to a trader an initial 1,000-tonne lot of gasoline from its Orsk plant for delivery to Pakistan and has more requests to supply gasoline, diesel and LPG to the country, the sources added.

The refined products will be shipped from the Orsk refinery in Russia’s Orenburg region near the Kazakhstan border to Afghanistan by rail and reloaded into tank trucks for delivery to Pakistan, as Russia and Pakistan don’t have direct rail connections, the sources said.