Attock refinery announces closure of main crude plant amid road closures

The refinery is the only such facility catering to the fuel requirements of almost all of central and northern Punjab, as well as Khyber Pakhtunkhwa, Azad Jammu and Kashmir and Gilgit-Baltistan.

In a mandatory regulatory filing to Pakistan Stock Exchange (PSX) and Securities & Exchange Commission of Pakistan (SECP), ARL reported that its main crude distillation plant with 32,0000 barrels of daily refining capacity has been shut down.

It said it could not send out refined products or receive crude oil coming from oil fields.

“We wish to inform you that due to the expected arrival of foreign delegates in Islamabad, there has been an abrupt suspension of oil tank lorry movement to and from ARL. This situation has adversely impacted crude oil receipts as well as product dispatches, directly affecting refinery operations,” ARL wrote to PSX and SECP.

It further added that due to constraints in product dispatch, ARL’s stocks of Motor Spirit (MS) and High-Speed Diesel (HSD) have increased significantly.

“Concurrently, our crude oil receipts have also declined significantly due to the road closures. As a result, we have shut down our main crude distillation unit (HBU-I) of 32,400 barrels per stream day (BPSD) capacity till improvement of the current traffic restrictions”, the refinery’s management said in its mandatory regulatory reporting.

According to informed sources, as a result, most of the oil production in Punjab’s Jhelum and Attock region, as well as nearly all fields in KP, would have to be shut down and may face structural challenges.

The regulatory filing is mandatory under clause No. 5.6.1 of the Rule Book of PSX and sections 96 and 131 of the Securities Act, 2015, read with Notification SRO. No. 143(1)/2012.

ARL asked the PSX to disseminate this critical information to trading right entitlement (TRE) Certificate Holders of the Exchange accordingly.

Over the last week, ARL had been requesting the Petroleum Division and the Oil & Gas Regulatory Authority (Ogra) to facilitate the movement of oil lorries to and from its refinery, but was unable to secure the right of way.

In separate letters, it drew attention to the closure of roads for the movement of oil tank lorries from April 18 to April 26 due to the expected arrival of foreign delegates in Islamabad.

It elaborated that ARL is the only refinery located in the northern region of the country. It receives crude oil from local oil fields in KP and the Potohar region and plays a critical role in meeting the petroleum requirements of this region and beyond. This includes the supply of aviation fuel to Islamabad and Peshawar airports, as well as fuel support to the armed forces.

ARL also provides Furnace Fuel Oil to independent power producers (IPPs) to help mitigate power shortages in the country.

Any abrupt closure or stoppage of oil tank lorries to and from ARL during the above-mentioned period will severely impact crude oil receipts at ARL and will also disrupt the supply of refined products to retail outlets, including airports and defence needs, the refinery said.

It had warned that any prolonged disruption in tankers’ movement would significantly affect product upliftment and could ultimately force ARL to reduce refinery throughput, potentially leading to a complete shutdown.

“Foregoing in view, we respectfully request your kind intervention to grant exemption from the proposed restrictions enabling uninterrupted movement of crude and product oil tank lorries to and from ARL” on an urgent basis, the refinery had written.

The state-run Oil and Gas Development Company Ltd (OGDCL) announced last week that it had begun commercial production from the country’s largest oil and gas discovery from a single well.

OGDCL had stated that Baragzai X-01 (Slant) exploratory well in the Nashpa Block, Kohat district of KP, is now the highest-producing well and contributes approximately 10pc of OGDCL’s total crude oil production.

Petroleum Minister Ali Pervaiz Malik had formally inaugurated the commencement of commercial production.

With the injection of 5,300 barrels of oil per day (bps), 17 million standard cubic feet per day (mmscfd) of gas, and 15 tonnes per day of liquefied petroleum gas, the cumulative production from the well reached 15,000bpd and 45 mmscfd of gas.

Oil and gas production from the well is projected to reach 25,000 bpd and 60 mmcfd in the near future, the state-run energy firm announced. Crude production from the field is brought to ARL for refining.

The estimated daily revenue from the Nashpa block, according to OGDCL, stands at Rs156m, with monthly revenues projected at Rs4.7bn and annual revenues at Rs57bn, resulting in annual foreign exchange savings of approximately $329m by reducing reliance on imported fuels, the OGDCL said.