Refinery, capable of producing 40,000bpd, is expected to be fully commissioned by 2016-17. ILLUSTRATION: JAMAL KHURSHID
ISLAMABAD:
The country’s first trillion-rupee-company Pakistan State Oil (PSO) and the government of Khyber-Pakhtunkhwa (K-P) signed a deal to build a $600 million oil refinery, with a refining capacity of 40,000 barrels of oil per day.
The multimillion dollar project is expected to be fully commissioned by 2016-17.
The refinery will be established as a public-private partnership, of which PSO will hold a stake of 45% and K-P to own 25%. The remaining 30% stake will be divided into private equity which can own a maximum 20% stake and the rest (10%) will be floated on the stock market after completion of the project.
The cost of the project had been estimated at $600 million however, final cost will be determined after completion of the feasibility study. They said that physical work on the project was expected to start by the end of the calendar year. An official of the petroleum ministry said that the proposed refinery will be a state-of-the-art project, capable of producing Euro-4 compliant products.
According to the agreement, the refinery will span over 400 acres of land in Kohat, K-P.
According to a press statement on Thursday, the refinery will help improve the overall availability of petroleum products across the country as well as result in a sizeable foreign exchange savings for the nation. It shall also increase PSO’s operational base through diversification in the midstream segment and lower distribution cost in the related supply envelopes.
In addition to these benefits, the refinery will also help create job opportunities for the local populace as well as professionals from various technical backgrounds. It is also expected that substantial foreign direct investment will also take place as a result of this project.
Both parties were of the opinion that the proposed project will serve as the foundation for future joint initiatives and suggested to continue efforts to do more for the future progress and prosperity of Pakistan.
Speaking after the event, PSO MD Naeem Y Mir said, “By establishing the refinery, PSO has taken yet another step on the road to developing a self-reliant energy supply chain for the country. The company is already working on a number of other projects, which coupled with this refinery will help meet Pakistan’s energy needs in the years to come.”
Published in The Express Tribune, April 12th, 2013.
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COMMENTS (13)
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PSO has no money to establish LC for Crude or Products, where will it get the money and expertise to put up a refinery. Where will the crude come from, transported from Gawadar ?
First this an old news which keeps repeating every couple of month, roughly speaking. Maybe part of PSO's media person's KPI! Secondly, the headline "oil and has production" implies that it is an upstream subject although refining is considered downstream. More appropriate term would be "petroleum production". I can feel for the reporter, who is an old chap in the field, for the poor presentation, which must go imo in the account of the editor. This is not surprising, btw, as ET has shown low quality reporting+editing quite consistently when it comes to Economy and especially Energy.
Where will it source crude oil from? If transport of crude is from Karachi to KPK, isn't it better to have the refinery near the coast and transport the finished goods rather than the crude, to the consumption centers?
Good News; There are lot of Gas reserves in that region also however no concrete step & policies have been formulated by the previous Govt of PPP due to their vested interests. Gas Reserves found are in TCF and work must be expedited to realize these reserves; We are in dire need of such oil & gas resources.
I thought PSO had no money as payments were held up by power companies.
What is wrong with these people ? Refineries should close to source or supply of crude oil You don't build a refinery where there is no oil ! Wonder who is getting kick backs on this venture. 10 per cent is a pretty hefty amount.
Very naive statement probably an election stunt. I am sure the PSO officers know very well that it takes not less than 6-7 years to set up a grass roots refinery project. Even though this refinery is small in throughput, infrastructure required for crude as well as prducts remains the same. Adding to the woes will be the hostile situation in the area.
Good to hear that it is going to be build in KPK poor people of KPK had to travel to other provinces for work,it would be significant change as it will create thousands of jobs
There are so much development opportunities in our country but the politicians are making mess. Lets hope for the best in elections
Refining capacity is very small compared to us
If this project ever takes place, it will go the same route like the Pakistan Steel Mill in Karachi has gone and is going. Public sector should keep out of it if this project to succeed. It is always a mistake for the Federal and provincial governments to get involve and they will certainly see to it that some incompetent people get in there, let me ask the KP government what has happened to the Bread Manufacturing(ROTI) Plant in Peshawar. My answer will be that they have run it in the ground like the federal government had done it to the PIA. To be fair to the people of KP is to float 55% of stock on open market and let the people invest in it directly and keep the politicians , military and bureaucracy out of it.