Chinese Corporation to Provide $1 Billion to Upgrade Pakistan Refinery Ltd

A Chinese investment company has decided to invest $1 billion in Pakistan Refinery Limited (PRL) to upgrade its production facilities. The Chinese firm has stipulated that no government involvement should be allowed in the deal and demanded repayment in dollars. The China Export & Credit Insurance Corporation (SINOSURE) has also demanded zero government involvement in the financing facility. PRL has reassured the Chinese firm that it will generate the required dollars for repayment by exporting petroleum products. The PRL upgrade will potentially increase production capacity from 50,000 to 100,000 barrels per day, while shifting to a deep-conversion process to produce Euro 5-compliant high-speed diesel (HSD) and petrol, and phasing out furnace oil. The refinery currently produces 250,000 tons of petrol annually, which could rise to 1.5 million tons after the upgrade. HSD output could increase from 600,000 tons to 2 million tons. PRL and China’s United Energy Group (UEG) signed an MoU in October 2023 to formalize their collaboration. Additionally, PRL signed agreements with Honeywell UOP and Axens to produce Euro 5 gasoline and diesel and plans to invest alongside other refineries under the amended Pakistan Oil Refining Policy 2023 to upgrade its production facilities.