$5-6bn upgrade: Deadline for refineries to sign IAs to be extended by 6 months

ISLAMABAD: The Cabinet Committee on Energy (CCoE) meeting scheduled to be held on July 2 (tomorrow) is set to approve an extension in the deadline for local refineries to sign Implementation Agreements (IAs) for their upgrade projects for another 6 months under the amended brownfield refineries’ policy 2023.

This is just to accommodate the country’s two bigger refineries, Pak-Arab Refinery Company (PARCO) and Cenergyico, having over 50 percent contribution in refining output.

However, the 6-month extension will delay the initiation of $5-6 billion investment for upgradation purposes. The local refineries such as Attock Refinery Limited (ARL), Pakistan Refinery Limited (PRL) and National Refinery Limited (NRL) may be allowed to sign the IAs so that they could start investing about $3 billion in their upgrade projects in the next 7 years time.

However, the 6-month time would be extended to PARCO and Cenergyico for inking the Implementation Agreements.

As per the summary sent to CCOE, under the amended policy, PARCO is in process of updating its feasibility study after which its board of directors will take decision on the planned upgradation.

The earlier deadline for signing IAs was April 22, 2024, but PARCO didn’t submit its upgrade project. The proposed extension in the deadline will enable PARCO to come up with its upgrade project after conducting its feasibility and Cenergyico to settle the dues of Rs47.5 billion in the head of Petroleum Levy with FBR and Finance Division.

The Petroleum Division has sent a summary for the Cabinet Committee on Energy (CCoE) to accord approval to the extension in signing Implementation Agreements (IAs) for 6 months after getting comments from Ogra, Law Division, Planning Commission and Finance Division.

The deadline for signing of Upgradation Agreements with Ogra was April 22, 2024.