Indus Refinery to start commercial production in March 2009

The Indus Refinery Limited (IRL) will start commercial production of petroleum products in March 2009 at a cost of $750 million. The Chairman of IRL, Muhammed Sohail Shamsi, told Business Recorder on Saturday after the signing a Memorandum of Understanding (MoU) with Descon Engineering Limited, which would execute civil works for IRL's 100,000 barrel per day petroleum refinery in the proximity of Port Qasim Authority (PQA).
Keeping in view the declining demand of motor gasoline in the country, he said, the new refinery was eyeing export of these products. He said that the refinery would produce one million tons kerosene per annum and 1.5 million tons high-speed diesel (HSD). The IRL would also produce 500 tons liquefied petroleum gas (LPG) per day, he added.
Sohail said, "The refinery is being constructed to produce maximum yields of profitable products. The products produced will meet the deficit requirements of Pakistan, with any surplus to be exported." Thus, the country would save foreign exchange in terms of import substitution and it would also earn from exports of surplus products, he added.
"By March 2009 this mega project would produce 30,000 barrels more, which will further strengthen the company's position in the sector," he said, adding that as a refinery, IRL would produce propane, butane, LPG, high quality unleaded gasoline, kerosene, aviation fuels, low sulphur high speed diesel. The IRL foreign shareholders have 86.7 percent shareholding while local sponsors have a 13.3 percent shareholding.
Earlier, the IRL--a joint venture between Middle East-based investors and local sponsors--inked an MoU with Descon Engineering Limited which would provide civil works for IRL.
Descon will provide all personnel, equipment and services to complete IRL's earthworks, grading, paving, underground piping, underground electrical trenches, tank dikes, concrete foundations and slabs. The work is expected to take 18 months to complete and is scheduled to allow for ongoing mechanical re-erection and electrical and instrumentation work.
Chief Executive Officer of IRL, Peter J. Hamill, said, "It is a landmark occasion for IRL and a significant development in the oil and gas sector of Pakistan." IRL has also engaged world class engineering firm SNC Lavalin to act as project manager, Ventech Engineers International as process engineer and advisory firms Jacobs Consultancy and Vitol to ensure a successful project, he added.
During construction the refinery will provide lots of jobs to locals and, when completed in early 2009, it would provide over 600 jobs to permanent skilled workers, he said.
Amer Kamran Khuaja, Director, Business Development, Descon said, "With a rich experience of over 30 years in plant construction and all disciplines, we are pleased to be part of this mega project. We will be utilising a fully integrated information technology (IT)-based systems, custom developed by our wholly-owned division, Descon IT 24." He said that the system was fully integrated, from proposal to preparation to project progress and cost control.
IRL has taken the initiative to relocate, reconstruct and operate refinery to become the sixth petroleum refinery in the country, enabling it to be one of the top two largest refineries. The IRL has a design capacity of 100,000 BPCD or 93,000 BPSD, which is equal to the country's current largest refinery.
In September last year, the Indus Refinery inked a MoU with Fauji Oil Terminal Company (FOTCO) for the development and construction of an additional oil jetty at Port Qasim. The new oil jetty will be equipped with modern operating equipment and is expected to be completed by the third quarter of 2008.
On completion of the two-year project, the oil jetty will be the focal point of activity for IRL for the import and export of POL products.
The new jetty will handle all of IRL petroleum, oil and lubricants products enabling the new refinery in the private sector to have convenient access for the import and export of POL products. The new facility will provide logistics support to IRL thus facilitating the company to reduce operational costs and increase production.