Pakistan's Hub Power plans major energy expansion with new oil terminal and EV network

ISLAMABAD:

Hub Power Company has planned to build a Single Point Mooring (SPM) facility on the Hub coast for importing petroleum products for the state-run oil marketing company, Pakistan State Oil (PSO).

Hub Power also reveals that its oil and gas joint venture, Prime International, will participate in the upcoming bidding round for offshore exploration with partners and consortiums being formed for the purpose.

At present, Pakistan has only one SPM facility, set up by Cnergyico PK for transporting imported crude oil to the refinery. The SPM has an oil pipeline within sea, which takes crude oil to Cnergyico refinery.

Hub Power is working on an SPM proposal, however, its purpose will be to transport refined petroleum products to PSO for onward supply to dealers.

In a briefing for brokerage houses arranged by Topline Research, the management of Hub Power said that it was considering building SPM on the Hub coast for the import of petroleum products for PSO.

The plan involves using available storage tanks and transporting products through the Asia Petroleum Pipeline – in which PSO has a 49% stake – to Zulfiqarabad, where it connects with the White Pipeline that extends to the north. The company will be forming a joint venture-type structure for this transaction.

The management explored different options for its base plant in Hub, which has a huge piece of industrial land spread over 1,100 acres.

The options include setting up an aluminium smelter, which is an energy-intensive business and can help address Pakistan's surplus energy issue, while allowing Hubco to use its existing base plant as a backup. Since the site is located with land and sea transportation infrastructure, they will be able to easily import alumina (the raw material).

Given Pakistan's significant bauxite reserves, estimated at 200 million tons, including 74 million tons of identified reserves in Khushab, AJK, Khyber-Pakhtunkhwa and Ziarat, complete integration across the value chain can be explored at a later stage.

Hubco's senior management including CEO Kamran Kamal and CFO Muhammad Saqib gave a briefing on the recent financial results and the outlook.

Regarding the power-sector circular debt resolution, the company stated that they were not aware of any talks on waiving the late payment surcharge. They mentioned that any discussion on the matter would take place at the government-to-government level as those were China-Pakistan Economic Corridor (CPEC)-related plants and the relevant forum for such deliberations was the Joint Cooperation Committee (JCC).

Owing to the government's focus on this area and timely release of planned subsidies, the company's recoveries have improved, particularly for its coal-fired power plants. This is a reason for the reduction in finance cost along with a lower interest rate.

Regarding auto manufacturer BYD, Hubco officials said that they had received a much better response than what was initially expected in the market. They are currently the largest electric vehicle (EV) company in Pakistan and the demand for Atto 3 has increased steadily. BYD's local assembly will begin in the second half of 2026.

Hubco management emphasied that BYD offers a complete range of vehicles – from small cars to luxury sports utility vehicles (SUVs). For now, they have launched a C-segment SUV based on affordability, considering that the target customers can install their own charging infrastructure.

The company is also developing Pakistan's first and largest EV charging network, which will extend from Karachi to Peshawar along the motorway, thereby enabling EV adoption in the country.

Regarding car exports to right-hand-drive countries, the management saw a potential for that in the future, however, their current focus was on developing the plant. Two international financing partners are already on board.

Hubco's two coal-based plants are expected to declare project completion date (PCD) soon, after which they will be able to announce dividends. Unlike China Power Hub Generation Company (CPHGC), which declares dividends once a year, Thar Energy Limited (TEL) and ThalNova can declare dividends twice annually. The first dividend is expected to be higher than the return on equity (ROE) and is likely to be announced this quarter.

The company has a history of pursuing growth through diversification, having previously invested in coal power plants, exploration & production and is currently targeting EVs. It is also focusing on the mining sector and has recently invested in a junior mining company, Ark Metals (Pvt) Ltd, and is exploring other strategic opportunities, including participation in the privatisation of Pakistan International Airlines (PIA) as part of a consortium.