July 11, 2019: The government is all set to perform groundbreaking of the much-delayed multibillion dollar coastal oil refinery by end of this year with the confidence that the project, having capacity to produce 250,000 barrels per day (BPD), would be completed within the scheduled time-frame.
Pak Arab Refinery Limited (PARCO) has proposed to establish the state-of-the-art Coastal Refinery at Hub, Balochistan with an estimated cost of over $ 5 billion.
“Under the project, expected to be completed by end 2023, around 250,000 BPD oil will be refined, which is equal to 13 million tons of petroleum products per year,” a senior official privy to petroleum sector developments said on Thursday.
Around 1,000 acres of land had been allotted for the project, approved in October 2007 but remained suspended due to paucity of funds.
Terming the project a ‘significant step,’ towards achieving self-reliance in the oil production sector, he said, the government was making all-out efforts to upgrade existing oil refineries and establish new deep conversion facilities for meeting the country’s fuel requirements in a smooth manner.
The country's domestic production of crude oil has witnessed around 12. 8 percent increase during a nine-month period (July-March) of last fiscal year as compared to same period in 2017-18. The domestic production of crude oil stood at 24.6 million barrels as compared to 21.8 million barrels in 2017-18.
Pakistan’s average annual oil consumption is around 26 million tons (MT), out of which 13.5 MT is met through local production of eight existing oil refineries. While, 50 per cent crude oil is imported to meet the energy needs.
Answering a question, the official said an unprecedented incentives package was in place for setting up new deep conservation oil refineries, enabling them to import machinery, vehicles, plants and equipment and other materials.
He said another state-of-the-art oil refinery and petrochemical complex was being established at Gwadar deep seaport city, an ultimate destination of China Pakistan Economic Corridor, with around $11 billion Saudi investment.
Pakistan and Saudi Arabia have also agreed to establish a Joint Working Group (JWG) for timely and smooth execution of the project, which has tremendous potential to capture markets in China and Central Asian landlocked states where fuel supply takes weeks to reach through other routes.
The official said the JWG would hold regular interaction to exchange information needed to carry out feasibility studies of the project on a fast track.
Under the CPEC route, he said, the fuel transportation to China via Pakistan would take just seven days as import through western China takes almost 40 days.
The official said the mega oil facility, having capacity to refine 200,000 to 300,000 BPD oil, would also help refine and store imported oil for onward transportation to China and develop fuel supply chain for the landlocked Central Asian states.
He expressed confidence that with establishment of the modern oil refineries and petrochemical complex, there would be a significant reduction in the country’s oil import bill.