Pakistan’s oil refining industry is moving toward a major transformation, with five domestic refineries preparing investment plans worth an estimated $4.5 billion to $5 billion. The proposed projects focus on increasing refining capacity, producing cleaner fuels, reducing furnace oil output and upgrading facilities to meet modern fuel standards.
The development follows amendments to the government’s Brownfield Refineries Upgradation Policy, which has introduced a tighter timeline for refineries to move from plans to formal implementation agreements. Under the revised policy, companies have 45 days to sign their agreements with the government.
Parco Leads With Green Fuel Investment
Pak-Arab Refinery Company (Parco), one of Pakistan’s largest refining companies, has committed to a $600 million green fuel project after assessing different options for modernizing its operations.
Rather than pursuing a standalone bottom-of-the-barrel project, Parco selected a green fuel-focused approach. The company has already reduced its furnace oil production from roughly 20% to around 14% through operational improvements. Its new project is expected to bring that figure down to approximately 10–11% during the first phase, with a longer-term objective of eliminating furnace oil production altogether.
The upgrade will also move Parco completely from Euro-III to Euro-V fuel standards. Gasoline production is expected to increase from approximately 3,678 tonnes per day to more than 4,000 tonnes per day, while diesel production is also projected to rise.
PRL Plans to Double Refining Capacity
Pakistan Refinery Limited (PRL) is preparing one of the largest investment projects under the programmed, with an estimated cost of $1.8 billion to $2 billion.
The company’s proposed bottom-of-the-barrel project is designed to eliminate furnace oil production while improving the refinery’s overall product mix. More significantly, PRL plans to increase its crude processing capacity from 50,000 barrels per day to 100,000 barrels per day.
Such an expansion could significantly strengthen PRL’s ability to supply petroleum products to the domestic market while reducing the need for imports.
Attock Refinery Targets Cleaner, Higher-Value Products
Attock Refinery Limited (ARL) is also moving forward with its previously announced modernization programmed, estimated at around $600 million.
The project includes a Continuous Catalytic Reformer, improvements to its diesel hydrodesulphurization unit, a kerosene hydrotreating facility, additional storage and utility infrastructure, as well as a biofuel facility required under the revised policy.
Once completed, the upgrade is expected to enable ARL to produce Euro-V quality fuels and increase motor gasoline output by approximately 25%.
Cnergyico Eyes $1.2 Billion Expansion
Cnergyico Pakistan Limited, the country’s largest private refinery, has outlined an investment programmed of approximately $1.2 billion.
The company’s strategy involves several stages. The first focuses on producing Euro-V and Euro-VI compliant petroleum products. The second involves a bottom-of-the-barrel project, for which technical studies are being conducted. The final phase is expected to increase refining capacity and develop a new Single Point Mooring facility to support the import and export of crude oil and finished petroleum products.
Cnergyico currently has refining capacity of around 156,000 BPD and aims to increase this to approximately 200,000 BPD.
The company also expects its upgraded facilities to significantly increase gasoline and diesel production while reducing the amount of furnace oil generated during the refining process.
NRL Considering a Hybrid Upgrade
National Refinery Limited (NRL) is considering a more flexible approach through a proposed $300 million to $800 million hybrid project combining green fuel and bottom-of-the-barrel technologies.
NRL has already achieved Euro-V production for high-speed diesel, while further work is underway to determine the best configuration for motor gasoline and other products.
The proposed investment would substantially reduce furnace oil production. NRL is also considering increasing its crude refining capacity from 50,000 BPD to 70,000 BPD, although the final scope of the project has yet to be determined.
A Potential Turning Point for Pakistan’s Oil Industry
Taken together, the five projects could bring up to $5 billion in investment into Pakistan’s refining sector. The programmed represents a shift away from older refining configurations toward facilities capable of producing cleaner and more commercially valuable petroleum products.
A major objective is to reduce furnace oil production. As demand for furnace oil has declined, producing large quantities of it has become less attractive for domestic refineries. Converting more of the crude barrel into gasoline, diesel and other higher-value products could therefore improve refinery economics.
The move toward Euro-V and Euro-VI standards is another important element. Cleaner fuel production would improve the quality of petroleum products available in Pakistan and bring domestic refining operations closer to international standards.
However, the proposed investment figures should not yet be viewed as completed investments. The immediate test will be whether the refineries sign their implementation agreements within the government’s new 45-day deadline and subsequently secure financing and execute the projects.
If the plans move ahead as intended, Pakistan could see a significant expansion and modernization of its refining capacity, improved fuel quality and a more efficient domestic petroleum supply chain. The coming months will therefore be crucial in determining whether the proposed $4.5–5 billion refinery transformation becomes a reality.