Pakistan Refineries Advance $5bn Upgrade Investment Plan
Pakistan’s long-awaited refinery modernisation programme has moved into a decisive phase, with five domestic refineries preparing investment plans worth around $4.5 billion to $5 billion. The development emerged in Islamabad on Monday, August 17, as the government pushed local oil refiners toward formal implementation agreements under the amended Brownfield Refineries Upgradation Policy.
The plan is significant because it targets one of the country’s most important energy-sector weaknesses: outdated refining capacity and continued production of lower-value furnace oil. The proposed upgrades are expected to shift refineries toward cleaner fuels, better product yields and higher-value output that can help meet Pakistan’s changing energy needs.
A major breakthrough involves Pak-Arab Refinery Company, Pakistan’s largest refinery, which has agreed to move ahead with a $600 million green fuel project. Parco had taken time to review technical options after commissioning studies on its upgrade path, but its management has now informed the government that it will sign the required agreement within the given deadline.
A senior Petroleum Division official cited in the report said the government is finalising upgrade agreements for all local refineries. The official indicated that the documents are likely to be signed together at a high-level ceremony, with Prime Minister Shehbaz Sharif expected to be present when the process reaches its formal approval stage.
Under the revised policy, refineries must sign implementation agreements within 45 days, tightening the earlier timeline of 60 days. The shorter deadline shows that the government wants to move the sector from repeated discussions and technical assessments toward actual investment decisions, construction planning and execution.
Parco’s project is expected to reduce its furnace oil share further after the company already lowered it from about 20 percent to nearly 14 percent through operational measures. In the first phase, furnace oil production could fall to around 10 to 11 percent, while a later phase aims to remove furnace oil from the refinery’s production profile altogether.
The modernisation drive also includes major plans by Pakistan Refinery Limited, Attock Refinery Limited, Cnergyico Pakistan Limited and National Refinery Limited. PRL is preparing one of the largest projects, estimated at $1.8 billion to $2 billion, which could double its crude refining capacity from 50,000 barrels per day to 100,000 barrels per day.
Cnergyico is planning a $1.2 billion programme covering green fuel, capacity expansion, bottom-of-barrel processing and a new single-point mooring facility. Attock Refinery is preparing a project of about $600 million to improve fuel standards and expand gasoline production, while National Refinery is evaluating a hybrid upgrade that may cost between $300 million and $800 million.
For Pakistan, the impact could be far-reaching. Cleaner fuels, higher refining capacity and reduced furnace oil output may support energy security, reduce pressure on imports of refined products, improve compliance with modern fuel standards and strengthen industrial investment at a time when the economy needs long-term capital inflows.
The next step will be the signing of implementation agreements and the finalisation of project timelines by each refinery. If the process remains on track, Pakistan’s refinery sector could enter its most important transformation phase in years, with direct implications for fuel supply, environmental standards and the country’s wider energy strategy.