Byco Petroleum Pakistan Ltd aims to cut Pakistan's reliance on oil product imports by nearly 65 percent once it ramps up operating rates at its new refinery, now the country's largest, a senior company official told Reuters. The company started operations at the 120,000 barrels-per-day (bpd) refinery - manufactured in the United Kingdom and assembled in Pakistan - in June this year next to its 35,000 bpd refinery in the Balochistan coastal area.
Once the new refinery, currently shut after being hit by a fire late last month, is able to run at maximum rates, Pakistan's overall refining capacity will increase to about 400,820 bpd from 284,800 bpd, said Asad Azhar Siddiqui, Byco Petroleum's chief financial officer. "When our new refinery is 100 percent operational, there will only be a deficit in (fuel oil) and gasoline while diesel will be balanced," Siddiqui said in a telephone interview.
Pakistan's total requirement for crude oil and oil products is about 22 million tonnes a year or 464,110 bpd. It imports every year about 5 million tonnes of fuel oil, 3 million tonnes of gasoline and 2 million tonnes of diesel. Before the late-October fire, Byco was operating the new refinery at 30 to 40 percent of its nameplate run-rate on average, unable to ramp up to full capacity due to a long-term diesel contract between the country's main oil marketing company Pakistan State Oil and Kuwait Petroleum Corp, Siddiqui said.
"(PSO) will gradually start reducing their imports (from KPC) and we will pick up the market," he said, although he could not provide a timeline on when that would be. In the long term, Byco plans to add either a fluid catalytic cracker or a hydrocracker and a desulphuriser to produce more environmentally-friendly fuels, he said.
Byco's refineries can only meet domestic requirements of 0.5 percent sulphur content for diesel and 89 to 90-octane gasoline. Byco also aims to add another 50 retail outlets next year to the current 300. He expects gasoline demand growth, which increased by 20 percent in October, to continue to drive Pakistan's fuel growth. "Diesel growth is hardly 1 percent while fuel oil (growth) is stagnant as it's being replaced by liquefied natural gas (LNG)," he said.
Gasoline growth is being driven by a switch in consumption by motorcylists due to a shortage of compressed natural gas (CNG) and lower gasoline prices. Siddiqui said he expects the newer refinery to be restarted in 1 to 1-1/2 months after being knocked out last month by a fire at a heating unit. To meet its domestic commitments, Byco will have to increase its imports, he said, without specifying by how much. Byco started importing oil products this year, on average about 70,000 to 80,000 tonnes a month of fuel oil, 100,000 tonnes a month of diesel and about 20,000 tonnes of gasoline.