Pakistan refineries sign $6bn agreements to modernize infrastructure

Major Pakistani oil refineries have signed agreements to begin a $6 billion modernization program aimed at upgrading the country’s aging refining infrastructure. The initiative involves Attock Refinery Limited, National Refinery Limited, Cnergyico Pakistan Limited, and Pakistan Refinery Limited, with Pak-Arab Refinery Ltd. (PARCO) expected to join the program soon.

The upgrades are designed to enable the production of cleaner Euro-V standard fuels and reduce the output of lower-value furnace oil. By increasing domestic production of high-quality petroleum products, the project aims to decrease Pakistan’s reliance on expensive imports and strengthen national energy security amid regional geopolitical tensions.

Industry estimates suggest the modernization could save the national exchequer approximately $1.5 billion annually in foreign exchange. The implementation follows a multi-year policy development process that began in 2019 and received formal government approval in August 2023. The agreements were executed with Inter State Gas Systems (ISGS), the government-designated entity responsible for overseeing the upgrade program.