Ababeel
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UAE-Backed Khalifa Refinery Project Boosted By Chinese Demand
October 2011 | Industry News
BMI View: The 250,000b/d Khelifa refining project is proceeding now a new participation agreement between its two investors - IPIC and PARCO - has been signed. The refinery will help Pakistan free itself from refined fuels imports. However, the UAE-based backers of this project, far from limiting themselves to the Pakistani domestic market, could see them export products to the Chinese market.
The Pak-Arab Refinery Company (PARCO) and Abu Dhabi's International Petroleum Investment Company (IPIC) have signed a participation agreement to build the 250,000b/d Khalifa refinery, in the country's south-west Baluchistan region. The deep-conversion plant is expected to cost US$6bn. IPIC and other UAE government institutions will hold a 74% stake in the project, leaving the remaining 26% to PARCO. Feedstock will be provided by heavy crude imports from the Gulf.
A Matter Of National Energy Sovereignty
The Pakistani authorities have made the expansion of the downstream segment a question of energy sovereignty. According to the US Energy Information Adminsitration (EIA), the country had an end-year crude distillation capacity of just 276,050b/d, spread across seven plants. With oil consumption of 397,000b/d in for that year, Pakistan's products import requirement was 163,815b/d.
This national push for the expansion of domestic capacity is the reason for the major upgrade of the Bosicor refinery in Baluchistan, where Byco Petroleum (formerly known as Bosicor Pakistan) is assembling a new processing unit that should make it the country's biggest refinery. According to remarks made to Bloomberg in June 2010 by Byco CEO Amir Abbassciy, the company has received a 120,000b/d oil processing unit from the UK, costing US$450mn. When combined with an ongoing expansion of the site to 34,000b/d, which is expected to be completed during the summer, the installation of the new unit will take the refinery's nameplate crude distillation capacity to 154,000b/d.
Eyeing Chinese Imports Rather Than The Pakistani Market
Funding for the Khalifa refinery was approved in November 2009. The UAE holds a tight grip on the project; PARCO itself is a joint venture (JV) owned by the Government of Pakistan (60%) and the Emirate of Abu Dhabi (40%) through IPIC subsidiary Abu Dhabi Petroleum Investment Company.
The Khalifa project, the largest foreign direct investment (FDI) in the country thus far, offers potential for growth, as it gives the UAE an opportunity to establish refineries overseas that can process Middle Eastern crude, with the potential to then transport some of the output not consumed domestically to China.
This is supported by the deal signed in August 2010 by Pakistan's Indus Refinery and the China International Project Investment Management Centre to build a new plant in Karachi. Planned capacity of the plant, which is to be built near Port Qasim, is 203,000b/d. All of Pakistan's downstream projects involve international partners but this was the first plant to bring in Chinese backing. Investing in a Pakistani refinery at a major port could be the first step in a plan to set up a route through the country that could be used to channel oil products to China.
http://www.oilandgasinsight.com/
October 2011 | Industry News
BMI View: The 250,000b/d Khelifa refining project is proceeding now a new participation agreement between its two investors - IPIC and PARCO - has been signed. The refinery will help Pakistan free itself from refined fuels imports. However, the UAE-based backers of this project, far from limiting themselves to the Pakistani domestic market, could see them export products to the Chinese market.
The Pak-Arab Refinery Company (PARCO) and Abu Dhabi's International Petroleum Investment Company (IPIC) have signed a participation agreement to build the 250,000b/d Khalifa refinery, in the country's south-west Baluchistan region. The deep-conversion plant is expected to cost US$6bn. IPIC and other UAE government institutions will hold a 74% stake in the project, leaving the remaining 26% to PARCO. Feedstock will be provided by heavy crude imports from the Gulf.
A Matter Of National Energy Sovereignty
The Pakistani authorities have made the expansion of the downstream segment a question of energy sovereignty. According to the US Energy Information Adminsitration (EIA), the country had an end-year crude distillation capacity of just 276,050b/d, spread across seven plants. With oil consumption of 397,000b/d in for that year, Pakistan's products import requirement was 163,815b/d.
This national push for the expansion of domestic capacity is the reason for the major upgrade of the Bosicor refinery in Baluchistan, where Byco Petroleum (formerly known as Bosicor Pakistan) is assembling a new processing unit that should make it the country's biggest refinery. According to remarks made to Bloomberg in June 2010 by Byco CEO Amir Abbassciy, the company has received a 120,000b/d oil processing unit from the UK, costing US$450mn. When combined with an ongoing expansion of the site to 34,000b/d, which is expected to be completed during the summer, the installation of the new unit will take the refinery's nameplate crude distillation capacity to 154,000b/d.
Eyeing Chinese Imports Rather Than The Pakistani Market
Funding for the Khalifa refinery was approved in November 2009. The UAE holds a tight grip on the project; PARCO itself is a joint venture (JV) owned by the Government of Pakistan (60%) and the Emirate of Abu Dhabi (40%) through IPIC subsidiary Abu Dhabi Petroleum Investment Company.
The Khalifa project, the largest foreign direct investment (FDI) in the country thus far, offers potential for growth, as it gives the UAE an opportunity to establish refineries overseas that can process Middle Eastern crude, with the potential to then transport some of the output not consumed domestically to China.
This is supported by the deal signed in August 2010 by Pakistan's Indus Refinery and the China International Project Investment Management Centre to build a new plant in Karachi. Planned capacity of the plant, which is to be built near Port Qasim, is 203,000b/d. All of Pakistan's downstream projects involve international partners but this was the first plant to bring in Chinese backing. Investing in a Pakistani refinery at a major port could be the first step in a plan to set up a route through the country that could be used to channel oil products to China.
http://www.oilandgasinsight.com/
