National Refinery Limited (NRL) expects the government’s long-awaited refinery policy to be finalized soon, with most outstanding issues already resolved, according to Chief Executive Officer Asad Hasan.
Speaking at the Pakistan Investor Connect Conference organized by Topline Securities, Hasan outlined the company’s operational performance, financial position and long term investment plans, including a major brownfield refinery upgrade expected to cost between $400 million and $1.2 billion.
The proposed modernization project is expected to take five to six years to complete after the refinery policy is approved and implemented. NRL has appointed UK-based engineering consultancy Wood to conduct a feasibility study, after which the final upgrade plan will be prepared.
The upgrade is aimed at enabling the refinery to produce Euro-V compliant fuels while significantly reducing furnace oil output, aligning production with evolving fuel quality standards and domestic demand.
Management said up to 27.5 percent of the project cost for a new plant could be financed through the OGRA escrow account, while the remaining funding would come from internal cash generation and debt under an optimal capital structure.
A recent decline in smuggling activity, largely attributed to the prevailing security situation in Balochistan, has improved market conditions, allowing the company to sell its entire diesel production over the past few days.
The refinery currently operates at 85 to 90 percent of its nameplate capacity when processing lighter crude. Its existing crude mix consists of approximately 70 percent light crude and 30 percent heavy crude, with heavier crude remaining necessary for lubricant base oil production.
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