Pakistan is expected to sign refinery upgrade deals worth more than $6 billion on Thursday with five companies seeking to modernise ageing plants and increase domestic petrol and diesel production.
The agreements involve Pak-Arab Refinery Limited (PARCO), Pakistan Refinery Limited (PRL), National Refinery Limited (NRL), Cnergyico and Attock Refinery Limited (ARL), a senior Petroleum Division official told the media
The Petroleum Division and Inter-State Gas Systems (ISGS) were finalising the agreements through a series of meetings, with the official saying the parties were ready to sign.
The federal government has authorised ISGS to execute the agreements and supervise implementation. An earlier arrangement had assigned the Oil and Gas Regulatory Authority (OGRA) responsibility for managing the process.
An ISGS official said upgraded refineries would gain greater flexibility to process different crude grades, including Iranian and Russian supplies where permitted under applicable laws and international sanctions.
Read: Pakistan Refinery Upgrades Target Over $6bn Investment
The agreements form part of Pakistan’s Brownfield Refinery Policy, which aims to attract large-scale investment into existing refining infrastructure and reduce dependence on imported petroleum products.
Industry officials, however, warned that signing the agreements alone would not guarantee investment unless lenders consider the projects financially viable.
Their concerns centre on a reported proposal to replace jointly controlled escrow accounts for refinery incentives with government-controlled accounts. Industry sources said such a change could affect lenders’ assessment of fund security, accessibility and ring-fencing.
Refinery upgrades require substantial local and foreign financing, making the structure of incentive funds important to achieving financial close.
