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May 9, 2018

Papco’s mogas pipeline to replace vehicular transportation


May 9, 2018

KARACHI: A multi-grading white oil pipeline spreading over 784-kilometre is expected to be ready next year to supply motor gasoline in the upcountry amid a double-digit growth in demand of retail fuels, industry officials said on Tuesday.

The officials said the multi-grading of the 784km white oil pipeline from Port Qasim to Mehmood Kot in Punjab would be completed by second quarter of 2019, which would enable pipeline transportation of motor gasoline (mogas) to upcountry.

Pak Arab Pipeline Company (Papco) is undertaking the project with a cost of around $200 million, and it also envisages establishing motor gasoline storage facilities along the pipeline, having a cumulative capacity of 150,000 million tons. At present, the pipeline is only transporting high speed diesel.

Pak Arab Refinery (Parco) own 51 percent equity stake in Papco, followed by Shell Pakistan (25 percent) and Pakistan State oil (13 percent).

The pipeline has the capacity to transport eight million tons of the commodity/annum, which can be increased to 12 million tons/annum. “It would be sufficient to meet upcountry’s demand till 2022,” a Shell Pakistan’s official said.

Pakistan meets around 70 percent of demand of petroleum products through imports, which land in Karachi and are transported up north. The country consumes almost 25 million tons of petroleum products a year. Around 20 percent of diesel demand is met through import, while around 75 percent of motor gasoline demand is met through imports.

An official at Shell Pakistan said demand of retail fuel is expected to get the major boost during the coming years.

“The mogas demand increased two and a half times during the last five years partly due to natural gas being diverted to industrial use, growing automotive sales and rising per capita income,” the official added.

At present Pakistan consumes 650 million liters of mogas a month, and the demand is rising at the rate of 15 percent/annum.

Presently, the entire volume of mogas, which is a highly inflammable substance, is transported upcountry through truck lorries – an inefficient, costly and unsafe means of transportation. “The commissioning of the said pipeline will reduce the transportation cost to around one-third of the truck transportation costs, while it is fast and safe,” the official said.

Parco owns another pipeline from Mehmood Kot to Machike, Lahore, which is also being multi-graded and would be commissioned by mid 2019 as well. After its completion, mogas could be transported from Port Qasim to Lahore through the pipeline networks.

Shell Pakistan’s official said another pipeline is also at the planning stage – from Lahore to Peshawar via Islamabad, “but this would take time to be completed”. The official said the multi-grading project of the Port Qasim-Mehmood Kot pipeline had been delaying for quite some time, and Shell has played an instrumental role in reviving the project.

Shell Pakistan continues to invest in its fleet of tankers inducting vehicles to meet standards of Oil and Gas Regulatory Authority through professional contractors, the official said.

There are 22 registered oil marketing companies in Pakistan. They have a fleet of around 12,000 vehicles to transport hydrocarbons via roads.

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