PRL launches REUP to boost refining capabilities, urges policy support

KARACHI: Pakistan Refinery Limited (PRL) is embarking on an ambitious project to enhance and modernize its refining capabilities through the Refinery Expansion and Upgrade Project (REUP).

This initiative aims to propel PRL into a sustainable future, producing cleaner and environmentally friendly fuels, while meeting the growing demands of the market. However, the absence of a comprehensive refining policy to support industry development and attract investments remains a pressing concern.

The REUP project involves the expansion of PRL’s crude processing capacity from the current 50,000 barrels per day (bpd) to 100,000 bpd, along with the installation of deep conversion capabilities.

This will enable the conversion of the entire Fuel Oil production into valuable products such as Petrol and Diesel, while adhering to the stringent EURO V standard for environmentally friendly fuels.

To achieve this goal, PRL will transform its existing Hydro-skimming configuration into a state-of-the-art Deep Conversion Refinery, equipped with advanced technology and processes that align with the most rigorous environmental protocols.

The significance of the PRL REUP is manifold. It ensures compliance with international fuel standards, creates substantial employment opportunities, stimulates economic activity, and fosters skill development by training professionals on cutting-edge licensed technology.

Additionally, the project contributes significantly to the national GDP, reduces import dependency, and promotes import substitution, resulting in substantial savings of valuable foreign exchange. By increasing local production of refined products, the REUP project enhances energy security and lays the foundation for a self-sufficient and sustainable energy sector.

Tariq Kirmani, Chairman of PRL, has emphasized the necessity of a Brownfield Policy as a crucial enabler for existing refineries to pursue critical upgrades. He says, “With an investment of approximately US$5 billion, all existing refineries could undergo upgrades, resulting in a deep conversion capacity of around 400,000 bpd.”

He further said, “Slight government support would be a “win-win” proposition for all stakeholders. The Brownfield policy can act as a catalyst to attract much-needed investment to the country, enabling a larger deep conversion capacity compared to Greenfield refinery projects.”

Despite the significant economic challenges faced by the country, PRL remains resolute in realizing the REUP endeavour. Despite the devaluation of the rupee, which has nearly doubled the cost of the Front-End Engineering Design (FEED) work for PRL, the Board of Directors reaffirmed their dedication to the project during a recent board meeting.

The FEED work, currently underway and progressing satisfactorily, is expected to be completed by Q4, 2024. PRL also intends to execute multi-million dollar contracts for the acquisition of critical Technology Licenses, which are essential to progress the FEED work. EPC tenders are also scheduled to be floated by the fourth quarter of 2024.

The government of Pakistan has already approved a policy to attract Greenfield Refinery investments with a capacity of approximately 200,000–250,000 bpd, requiring an investment of over US$10-12 billion.

However, more than the Greenfield policy, the need of the hour is a policy for the upgrade of existing refineries, unfortunately, the approval for which has been pending for several months.

Copyright Business Recorder, 2023