Pakistan Refinery Limited (PRL) on Wednesday inked a long-term oil supply contract with Russia, enabling the company to purchase crude oil.
On the sidelines of the Russian Energy Forum, PRL signed a long-term agreement with its Russian counterparts for the supply of mutually agreed-upon crude oil specifications.
PRL is expected to receive the first cargo later this year.
In terms of capacity, PRL has partnered with the Refinery Expansion and Upgrade Project (REUP) to increase its refining capacity from 50,000 to 100,000 barrels per day.
The expansion project is aimed at helping meet local demand, transitioning from basic hydro-skimming to deep conversion, and generating ecologically friendly Euro V high-speed diesel (HSD) and MS Petrol. Meanwhile, the production of furnace oil will be finished.
This strategy adjustment corresponds with PRL’s aim to generate cleaner, more ecologically friendly fuels to meet market demand.
Essentially, the long-term deal enables PRL to purchase crude oil from Russia as per commercial terms, as agreed from time to time, without breaching the international commitments of Pakistan and the International Framework regulating such transactions.
It is pertinent to mention that PRL and the United Energy Group (UEG) of China have signed a Memorandum of Understanding for a $1.5 billion investment in the petroleum sector.
The company currently produces 250,000 tons of MS annually, however, production is expected to reach 1.5 million tons with the new deal. Also, HSD production will likely increase from around 600,000 tons per year to around 2 million tons.