20000418

Iran-Pak refinery

likely to come down

to $ 800m from $ 1150m

AHSRAF KHAN

KARACHI: The estimated cost of the proposed Iran-Pak refinery may come down by 350 million dollars to around 800 million dollars from the earlier protection of 1150 million dollars.

Sources said on Monday since the conception of the project in early 90s, major changes had taken place including technological advancement and recession in refinery business all over the world. The depressed demand for refinery equipment has brought a modern refinery unit cost to far below what it was in early 90s, they said.

Sources said that now the project economy was being reviewed taking into consideration various aspects as well as petroleum demand estimates of the country.

They further said that Perac, had sought a budgetary allocation of Rs.500 million for the project for the year ending June 2001. For last several years, the federal government has not provided the required funds for the project. Non-provision of the funds has prevented the Perac, the Pakistani sponsor of the project, from subscribing its equity share to the project while National Iranian Oil Company (NIOC) had allocated its initial equity share, sources said.

Pakistan faces a deficit in petroleum products. Currently 60 percent of the demand is in the Punjab, 28 percent in Karachi/Sindh and the balance in Balochistan and NWFP. The deficit has to be met by either building more refining capacity or importing the product. The mid-country Parco refinery, which is planned to come on stream by September next, would bolster the present supplies of product supplies. However, even this refinery will not be able to meet the projected demand, particularly for High Speed Diesel (HSD), analysts said.

Of the total 18 million tonnes of petroleum products requirement, about 6.5 million tonnes are being produced by Pakistan's existing refineries: Pakistan Refinery (PRL), National Refinery (NRL) and Attock Refinery (ARL). The shortfall is met by the import of 12.5 million tonnes. The petroleum demand is increasing at the rate of 6-7 percent a year.