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CNPC in talks to build 10 million ton per year oil refinery
Pakistan is negotiating with China National Petroleum Corp on building a 10 million tonne per year refinery that would slash its oil products import bill by up to two-thirds, the minister for petroleum told Reuters on Wednesday. Minister Shahid Abbasi said he hoped the final details of the deal, expected to cost between $3 billion and $5 billion, would be hammered out early next year. The refinery might be built in modular stages, he said, with the first phase capable of refining 3 million tonnes per year (60,000 barrels per day). "We hope to have final details within three or four months," Abbasi said.
Pakistan is spending - at current low oil prices - about $9 billion per year importing 15 million tonnes a year of gasoline, diesel and fuel oil, he said, and another $3 billion to $4 billion on importing crude oil. Around 80 percent of the country''s gasoline is imported, he said. The country''s refineries use outdated hydro-skimming equipment and desperately need updating, he said, only surviving due to a favourable tax regime.
Pakistan State Oil (PSO), the state-owned company that handles most of the country''s fuel imports, told Reuters they are also seeking a controlling stake in Pakistan Refinery Ltd so they could upgrade its equipment. PSO currently holds 22.5 percent of the refinery and is finalising details of a deal to take another 26 percent within this fiscal year, a PSO official said.
Abbasi said Pakistan was also seeking to save money by changing the grade of fuel they import from non-standard RON 87 - which is produced by Pakistan''s ageing refineries - to standard RON 92 plus within the next few months, he said. Although the fuel would be slightly more expensive, it was more efficient and moving to a standard fuel would allow more bidders to offer supplies to Pakistan, he said. "None of our products (that we import) are standard products," he said. "Oil importers are benefiting from this ... because the pool of people who will supply us is small."
Copyright Reuters, 2015
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