Byco is all set to become the leader in oil refining business in the country as its upcoming refinery of 120,000 barrel per day (bpd) capacity is likely to commence commissioning process during last quarter of 2011. At present, Byco has a smaller refinery having a capacity of 36,000 bpd. With the commissioning of new refinery, the total refining capacity would reach up to 156,000 bpd making it the single largest oil refining complex in Pakistan.
President Byco Oil Refining Business, Qaiser Jamal in an exclusive interview with Business Recorder said that Byco has, so far, invested over $750 million in this refining and infrastructure project. The capacity of this new refinery could be further enhanced by 20 percent, if required, he added.
"We have overcome all issues and challenges involved in setting up the refinery and now are moving in the direction where we would be refining our first crude oil consignment by the end of the current year", he said. In the present economic situation, it is a brave initiative by a corporate entity to invest in the project as well as create several thousand direct and indirect job opportunities in the country, he said.
It shows Byco's commitment with the country and also sends a positive message to the investors around the globe branding Pakistan to be a suitable destination for making investments, he added. He pointed out that besides being the biggest oil refinery in Pakistan, it also has an associated Isomerization Unit for converting and upgrading light naphtha into Gasoline which will be environment friendly as the product will be Benzene free with reduced sulphur and aromatic contents.
This will be country's first Isomerization Unit with a capacity of 12,500 bbl/day. Presently, most local refineries export naphtha which can be upgraded to gasoline by processing it through Byco's Isomerization plant. Gasoline obtained from Isomerization, besides rendering value addition to export naphtha, will provide import substitution as currently significant volume of motor gasoline is imported to meet country's requirement. This is an import-substitution project, which would help us move towards self-reliance in specific petroleum products.
Additionally, the new refinery also has an associated desulphurization unit which will help substantially reduced sulphur in HSD produced by Byco. Qaiser said that presently Byco receives imported Crude Oil at the Fauji Oil Terminal (FOTCO) at Port Qasim. This crude oil is transported to the refinery by road through bowsers. In order to reduce costs as well as environmental impact, Byco is installing country's first Single Point Mooring (SPM) facility in deep part of the Arabian Sea, approximately 15 kilometers from the Refinery at Mouzakund, Balochistan.
The Single Point Mooring (SPM) facility will add a completely new dimension in handling of imported crude and later even the refined petroleum products. The facility is being setup to allow the handling of imported crude oil and other petroleum products through SPM - an open sea anchorage with sub-sea and sub soil pipelines connecting it to the on-shore facilities.
The floating jetty will be connected to crude oil tank of approximately 130,000 metric tons, via 3.3 km on-shore pipelines and 11.5 km off-shore pipeline. "We import crude oil in cargo lots of about 65,000 tons but once SPM is operational by end 2011, we can charter bigger cargo ships which will bring considerable freight savings to the company". This facility would give a boost to the profitability of the company in longer run.
The SPM can currently handle vessels of 100,000 deadweight tonnage (DWT) and has the expansion capacity to add two more pipelines which would enhance facility's throughput. It also has the Phase 2 capacity to facilitate Very Large Crude Carriers (VLCCs) or ships of 250,000 DWT.
Byco achieved a significant milestone by successfully inaugurating its first Jet Fuel Terminal in Keamari called "Universal Terminal Limited". This state-of-the-art terminal exceeds the latest safety standards and is designed for rapid disbursement of product through multiple points into a single tank lorry.
About circular debt issue, Qaiser Jamal said that oil refining and marketing businesses are capital intensive therefore, inter corporate circular debt has made it difficult to continue operations smoothly. Byco's existing 36,000 bbls/day refinery is currently operating at a much lower throughput of 15,000 bbls/day due to shortage of funds. "We do not have funds to import crude oil and refine it for domestic consumption as these are stuck up in circular debt", he said.
Byco is waiting to be paid an amount of Rs 5.37 billion from the state owned entities to get the much-needed breather. "Faced with these issues, we have been unable to supply oil to state owned entities and are focusing more on strengthening Byco's retail marketing business to sell our products through our own outlets, "he said. Thus far Byco marketing has been able to establish over 210 retail outlets and is growing stronger by the day, he added.