Three new refineries in pipeline: National Assembly told

[LahoreEstate]

RECORDER REPORT
ISLAMABAD (November 08 2009): The Minister for Petroleum and Natural Resources, Naveed Qamar on Saturday informed the National Assembly that the project of setting up three oil refineries with total refining capacity of 465,000 barrels per day "are in pipeline".

These projects are as follows: Khalifa Coastal Refinery, in Hub, Balochistan, with capacity of 250,000 barrels per day; Bosicor Oil Pakistan Ltd, at Hub, Balochistan, with 115,000 barrels per day refining capacity; and Trans-Asia Refinery Ltd, at Port Qasim, Karachi, with capacity of 100,000 barrels per day.

In a written reply, he said that Pakistan's existing oil refineries have refining capacity of 248,506 barrels of oil per day. While giving the details of the capacities of the refineries, he said that Pak-Arab Refinery has capacity of 100,000 barrel per day; National Refinery 62,050 bpd; Pakistan Refinery Ltd 47,110 bpd; Attock Refinery 42,000 bpd; Bosicor Pakistan 30,000 bpd; Dhodak Refinery Ltd (OGDC) 2500 bpd; and Enar Petrotech Services Ltd has capacity of refining 2646 barrels per day.

The following incentives have been given under the current Petroleum Policy to attract local and foreign investment: no prior permission of the government is required for setting up of new refinery project. Import parity price formula linked to Singapore Mean FOB spot price for the new oil refineries, import of crude oil from any source subject to Price Economics after lifting local crude allocated if any, he added.

He said that concessionary rate of duties/taxes for the equipment not manufactured locally, refineries are free to sell their product to any marketing companies or they can set up their own marketing companies. The ECC of the Cabinet recently approved following additional incentives for all new mega projects of minimum 100,000 barrels per day production capacity to be installed along the coastal belt of Balochistan, particularly Gwadar, with 20 years income tax holiday, he added.

Naveed said that waiver of 5 percent Workers Profit Participation Fund (WPPF), subject to the condition that the entire proceeds would be exclusively spent for the benefit of the local labour and their welfare, through a board of trustees, to be specially established for this purpose and development surcharge would be waived at 0.5 percent of the value of exports under the EPZA Rules 1981. Guidelines for import of second-hand/refurbished oil refineries were approved by Government of Pakistan (ECC of the Cabinet) which are as under:

The terms and conditions contained in the Ministry of Commerce Trade Policy, 2008-09 will be applicable for import of second-hand refinery project in its letter and spirit. The sponsors shall ensure that the design of second-hand refinery should be thoroughly reviewed and verified by an independent engineering consultant having track record of design engineering and evaluation of refineries (including re-location), he said.

The sponsors shall verify/validate that all codes/standards eg American Petroleum Institute (API), American National Standards Institute (ANSI), American Society of Mechanical Engineers (ASME) which are as follows.

Sponsors shall ensure refurbishment of major equipment and controls from licensed Original Equipment Manufacturer's contractors with warranty. The refurbished equipment be subjected to extensive review to ensure that it conform to the mandatory codes for ensuring safety.

The sponsors shall comply with all applicable laws, rules and regulations including National Environmental Quality Standards (NEQS) and NOC from Environmental Protection Agency (EPA). There shall be no GOP guarantee/financial obligation and techno economics viability of the refinery whatsoever. The sponsors shall obtain license from Oil and Gas Regulatory Authority (IGRA) under Ogra Ordinance 2002. He said that Ogra shall follow/ensure above guidelines for grant of licence.

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