Attock Refinery shutdown to create POL, gas crisis up north

ISLAMABAD: Northern Pakistan would experience a shortage of POL products, once Attock Refinery Limited’s (ARL) crude storage hits maximum capacity in 6-7 days, leading to low refining capacity, Energy Ministry officials the told The News.

Explaining the situation, the officials said that ARL that uses 100 percent local crude, would have no capacity to store crude oil in a week. This, they said would not only curtail the transportation of crude from local wells, but would also result in the shutting down of the oil wells as well as the halting of 450-500mmcfd gas supply to the national grid.

A cut in supply of gas from these originating wells would cause an even severe gas crisis in the country, the officials added.

Availability of POL products in upper Punjab, Khyber Pakhtunkhwa, Gilgit-Baltistan, and Northern Areas would be in jeopardy, and resultantly the government would have to import 60,000 tonnes diesel, 60,000 tonnes MS, and 15,000 tonnes jet fuel per day. “More importantly, with the increase in IEFM (inland equalisation freight margin) the total impact would go up to $70 million per month,” they informed.

ARL CEO Adil Khatak also confirmed on Thursday that the upstream country could face a POL crisis and surging gas crisis. ARL’s major plant has already gone off because of the furnace oil ullage, with only small units working now.

He said that a 100 percent closure was also on cards, as crude oil storage tanks would be brimming at capacity after a week, and it would be impossible to maintain intake of crude for refining purposes.

“If crude oil transportation is closed down because of no capacity to store at ARL, heavy crude wells along with other wells in northern areas will be closed down. And about 450-500mmcfd gas that originates from all the wells in Pothohar and northern parts of the country will also be closed down causing more shortage of gas in the country,” Khatak added.

The government allowed some days to utilise the furnace in the Attock Gen power plant, but it stopped power generation from the said plant, which increased furnace oil stockpiles.

Lamenting the lack of coordination between the Petroleum and the Power Divisions to resolve the energy issues of the country, he said, “We are told that running the furnace oil-based power plants currently does not fall in the merit list because of generation cost and the squeezed electricity demand of the country.”

However, he maintained that the government needed to work on a coordinated and cohesive policy to tackle the problems of all stakeholders.

Earlier Kapco was used to consume the furnace oil of ARL for power generation, but it was now closed down as the agreement between Kapco and the government has expired. KAPCO management is trying its best to restore the power purchase agreement so that its powerhouse could be operational. He said that all refineries have suggested the government to ensure electricity generation of 1,500MW from efficient furnace oil-based power plants all the time for making refineries fully operational till their up-gradation.

The Petroleum Division’s relevant officials, however, said, “We are on it and trying to convince the power division to allow the powerhouse to utilise furnace oil of ARL.” They said that if furnace oil was not utilised, then there was a fear that ARL would not be able to refine the crude even at 34-35 percent capacity.