Pakistan Refinery Limited announces to undertake $1.2bn expansion project

[ghazi52]

Pakistan Refinery Limited announces to undertake $1.2bn expansion project

BR Web Desk
28 Dec 2021

The Board of Directors of Pakistan Refinery Limited (PRL) has announced to undertake an expansion project worth $1.2 billion.

The company shared the development in its filing to the Pakistan Stock Exchange (PSX) on Tuesday.

The statement read that the BoD in their meeting held on December 27, 2021 decided to undertake Refinery Expansion and Upgrade Project (REUP) with the following objectives:

Compliance with requirement to produce EURO V compliant High-Speed Diesel (HSD) and Motor Spirit (MS/Petrol); Expansion of crude processing capacity to 100,000 barrels per day (bpd); And, to achieve self-sustainability by upgrading from Hydro-skimming Refinery to Deep Conversion Refinery thereby, significantly reducing production of High Sulphur Furnace Oil (HSFO).

The company added that the project cost is currently estimated at $1.2 billion on the basis of a detailed feasibility study. However, “actual costing will be determined after the completion of the FEED study, followed by financial close and award of Engineering Procurement & Construction (EPC) contract,” it added.

PRL would undertake the Front-End Engineering Design or FEED study of the said project and appoint the financial advisor, with the successful bidder expected to be in place by the quarter ending March 31, 2022.

Back in April, it was reported that PRL is looking to buy a second-hand refinery complex to upgrade its operations and increase output.

As per an advertisement placed by PRL in media back then, it was undertaking an upgrade and potential expansion project to produce Euro V specification and high-speed diesel oil. For this purpose, it intends to purchase a pre-owned refinery complex with one or more conversion units, which should have a 50,000 to 100,000 bpd throughput design.

Oil purchase makes up a major portion of Pakistan's import bill, which also jumped 64% year-on-year in the first four months of the current fiscal year — from July to October.

 

[ziaulislam]

Pakistan Refinery Limited announces to undertake $1.2bn expansion project

BR Web Desk
28 Dec 2021

The Board of Directors of Pakistan Refinery Limited (PRL) has announced to undertake an expansion project worth $1.2 billion.

The company shared the development in its filing to the Pakistan Stock Exchange (PSX) on Tuesday.

The statement read that the BoD in their meeting held on December 27, 2021 decided to undertake Refinery Expansion and Upgrade Project (REUP) with the following objectives:

Compliance with requirement to produce EURO V compliant High-Speed Diesel (HSD) and Motor Spirit (MS/Petrol); Expansion of crude processing capacity to 100,000 barrels per day (bpd); And, to achieve self-sustainability by upgrading from Hydro-skimming Refinery to Deep Conversion Refinery thereby, significantly reducing production of High Sulphur Furnace Oil (HSFO).

The company added that the project cost is currently estimated at $1.2 billion on the basis of a detailed feasibility study. However, “actual costing will be determined after the completion of the FEED study, followed by financial close and award of Engineering Procurement & Construction (EPC) contract,” it added.

PRL would undertake the Front-End Engineering Design or FEED study of the said project and appoint the financial advisor, with the successful bidder expected to be in place by the quarter ending March 31, 2022.

Back in April, it was reported that PRL is looking to buy a second-hand refinery complex to upgrade its operations and increase output.

As per an advertisement placed by PRL in media back then, it was undertaking an upgrade and potential expansion project to produce Euro V specification and high-speed diesel oil. For this purpose, it intends to purchase a pre-owned refinery complex with one or more conversion units, which should have a 50,000 to 100,000 bpd throughput design.

Oil purchase makes up a major portion of Pakistan's import bill, which also jumped 64% year-on-year in the first four months of the current fiscal year — from July to October.

Classic buy scrap refinery ans then go cry to federal govt approach has to be stopped

 

[Patriot forever]

https://twitter.com/x/status/1475688136965505026

1) To give some perspective not only this is an upgrade in crude processing capacity to produce more finished products ( we import a significant amount of finished products like diesel and petrol which costs us a premium over crude).

2) Improved quality of fuels to Euro V standard.

3) The most significant part reduction in FO production ( higher value addition in form of petrol and diesel) Normally FO which has to purchased by the government otherwise the refineries would shut down.


Combine that with the multi billor petrochemical complex by Engro.

This is the value addition and import substitution we lacked for decades.

India has a highly developed petro chemical industry and it accounts for a considerable portion of their exports. We were just sleeping.

 

[vi-va]

https://twitter.com/x/status/1475688136965505026

1) To give some perspective not only this is an upgrade in crude processing capacity to produce more finished products ( we import a significant amount of finished products like diesel and petrol which costs us a premium over crude).

2) Improved quality of fuels to Euro V standard.

3) The most significant part reduction in FO production ( higher value addition in form of petrol and diesel) Normally FO which has to purchased by the government otherwise the refineries would shut down.


Combine that with the multi billor petrochemical complex by Engro.

This is the value addition and import substitution we lacked for decades.

India has a highly developed petro chemical industry and it accounts for a considerable portion of their exports. We were just sleeping.

Agree.

Jamnagar Refinery

List of oil refineries - Wikipedia

en.wikipedia.org

 

[IceCold]

Achi news per to sala sub ka sub kahin mar jata hain. No presence at all of threads like these but only on fake threads by PML N Media cell or government bashing.

 

[Enigma SIG]

https://twitter.com/x/status/1475688136965505026

1) To give some perspective not only this is an upgrade in crude processing capacity to produce more finished products ( we import a significant amount of finished products like diesel and petrol which costs us a premium over crude).

2) Improved quality of fuels to Euro V standard.

3) The most significant part reduction in FO production ( higher value addition in form of petrol and diesel) Normally FO which has to purchased by the government otherwise the refineries would shut down.


Combine that with the multi billor petrochemical complex by Engro.

This is the value addition and import substitution we lacked for decades.

India has a highly developed petro chemical industry and it accounts for a considerable portion of their exports. We were just sleeping.

Our dear Leader Nawaz Sharif planned for this. Imran Khan is just putting his takhti on it. Nawaz also had a Mars mission planned but IK in cahoots with the military sabotaged this project too.

 

[Jungibaaz]

Nice, so final costing and project evaluation still pending, any idea where the project financing is coming from?

 

[RIP Pak LAW]

This is coming after shelving of Saudia's so called $8-10 billion dollars refinary project

 

[313ghazi]

This is very good news. For anyone wondering why it's a big deal watch this short video.

 

[Kambojaric]

Nice, so final costing and project evaluation still pending, any idea where the project financing is coming from?

Would be interesting to know. Doubt its the Saudis given that they had their own refinery plans which it seems now wont materialize. Leaves the Chinese as the most likely candidate.

 

[Bilal.]

Would be interesting to know. Doubt its the Saudis given that they had their own refinery plans which it seems now wont materialize. Leaves the Chinese as the most likely candidate.

Most likely 70:30 commercial financing and company equity split.

 

[Patriot forever]

Nice, so final costing and project evaluation still pending, any idea where the project financing is coming from?

Currently 30%-40% of crude is converted to FO by our old refineries.

25-30% of the cost will be financed by the government , the rest is Company's own investment. It is coupled with significant tax holidays for new complexes. I think there is also some 10% protection tax proposed on import of value added petrol/diesel and other petro/chemical products . Tax holiday period for old existing complexes ( capacity expansion) I am not sure of, government wants them to upgrade not just enhance capacity. Euro V standard is being made mandatory.

There is no sovereign guarantee ( outrightly refused).

There is an another $800m project already underway by Byco in Jan 2021. This is the 2nd one.

Byco Begins Civil Works On FCC, DHDS Units

Karachi: Byco Petroleum Pakistan Limited, Pakistan’s largest oil refining company, reached a key milestone in its Upgrade 1 project by beginning civil works construction on 9th January, 2021...

www.thenews.com.pk

 

[Jungibaaz]

Currently 30%-40% of crude is converted to FO by our old refineries.

25-30% of the cost will be financed by the government , the rest is Company's own investment. It is coupled with significant tax holidays for new complexes. I think there is also some 10% protection tax proposed on import of value added petrol/diesel and other petro/chemical products . Tax holiday period for old existing complexes ( capacity expansion) I am not sure of, government wants them to upgrade not just enhance capacity. Euro V standard is being made mandatory.

There is no sovereign guarantee ( outrightly refused).

There is an another $800m project already underway by Byco in Jan 2021. This is the 2nd one.

Byco Begins Civil Works On FCC, DHDS Units

Karachi: Byco Petroleum Pakistan Limited, Pakistan’s largest oil refining company, reached a key milestone in its Upgrade 1 project by beginning civil works construction on 9th January, 2021...

www.thenews.com.pk

Great thank you, so we can say a hybrid financing structure, part government, partly on their own books.

I was curious because it seems that these sorts of projects typically have one of three financing means: federal government budget, foreign loans (CPEC portfolio style), or WAPDA style capital markets financings. Btw on the lack of sovereign guarantee, I believe WAPDA’s Eurobond 10-year Green debt issuance (PAKWNP on Bloomberg) also has no guarantee, yield spread is still no more than 0.5%

 

[Patriot forever]

Great thank you, so we can say a hybrid financing structure, part government, partly on their own books.

I was curious because it seems that these sorts of projects typically have one of three financing means: federal government budget, foreign loans (CPEC portfolio style), or WAPDA style capital markets financings. Btw on the lack of sovereign guarantee, I believe WAPDA’s Eurobond 10-year Green debt issuance (PAKWNP on Bloomberg) also has no guarantee, yield spread is still no more than 0.5%

Yes that is correct. WAPDA has good ratings I think B- along with the rapid growth in bond market for green ( environmentally friendly) projects.