Attock Refinery to buy 5,000 bpd of crude from southern oil fields in Pakistan

Attock Refinery Ltd. (ATRL) will buy 5,000 barrels per day (bpd) of crude oil from southern oil fields in Pakistan to improve its capacity utilization amid declining supplies in the northern regions.

The announcement came during an analyst briefing held on Friday, where the refinery detailed its plans.

Pakistan government has approved the allocation of 5,000 bpd of crude oil from the Badin Basin in the southern province of Sindh to support Attock Refinery, which is located in the north and relies on crude oil from the northern and Potohar regions.

Depletion in northern oil fields, mainly the Tal and Nashpa blocks, has reduced the refinery’s capacity utilization to 70-80%, down from nearly 100% historically.

In the year ending June 30, 2024, Attock Refinery exported 80,000 metric tons (mt) of light sulfur fuel oil.

According to Arif Habib Ltd., a brokerage firm, the refinery expects exports to increase to 120,000 mt in the year ending June 30, 2025. Due to the low sulfur content, the company fetches a higher price for the fuel oil.

Currently, the refinery produces 91-Ron Motor Spirit (MS) and Euro-III High-Speed Diesel (HSD) at 350 ppm sulfur.

Imported fuel includes 92-Ron MS and Euro-V HSD at 10 ppm sulfur, resulting in penalties for Attock Refinery. To address this, the company plans to upgrade its facilities, including the Continuous Catalyst Regeneration (CCR) unit, which aims to boost motor gasoline output by 25% and meet Euro-V standards.

Additionally, the Diesel Hydro Desulphurization (DHDS) unit will be revamped to produce Euro-V HSD, eliminating penalties and saving around PKR 15 billion annually.

The refinery, having a capacity of 53,400bpd, produces nearly 600,000 mt of motor gasoline per year. However, the availability of smuggled Iranian diesel and unwarranted imports has led to lower demand for diesel from the refinery.

The company has approached the government, which has taken prompt action to curtail smuggled Iranian products.