ATRL is assessing a major new refinery subject to additional local crude supplies and government support, while its US$600m upgrade project moves ahead.
KARACHI: Attock Refinery Limited (ATRL) is evaluating the establishment of a new 50,000 barrels per day (BPD) deep conversion refinery, subject to the sustainable availability of additional locally produced crude oil from northern fields and the provision of requisite government support.
According to a research report by Arif Habib Limited, the proposal was among the key developments highlighted in ATRL’s FY2026 Annual Report, which outlines an ambitious expansion and modernisation programme aimed at strengthening the refinery’s operational capabilities and improving petroleum-product quality.
During FY2026, ATRL operated at approximately 71 percent utilisation, compared with 69 percent in FY2025. Refinery throughput increased to 1.73 million tonnes, from 1.66 million tonnes a year earlier.
However, the refinery’s crude distillation units were partially shut down on several occasions because of weaker product offtake. Product supplies stood at approximately 1.55 million tonnes, while around 172,500 tonnes of low-sulphur furnace oil (LSFO) were exported amid subdued domestic demand.
ATRL also began receiving crude from newly discovered oil reserves during the fourth quarter of FY2026, a development expected to support higher refinery utilisation going forward.
Meanwhile, the company revalued its freehold land, generating a substantial Rs7.8 billion revaluation surplus.
Refinery expansion and upgrade project
ATRL’s expansion plans have gained momentum following amendments to the Refining Policy 2023.
According to the annual report, the US-Iran conflict highlighted the strategic importance of domestic refineries and prompted the government to address longstanding issues in the refining policy.
Following consultations with relevant stakeholders, the amended policy was approved by the Council of Common Interests (CCI) and the Federal Cabinet in July 2026.
The revised policy resolves the pending sales tax issue and introduces 10 percent tariff protection on motor spirit (MS) and an additional 2.5 percent protection on high-speed diesel (HSD) for seven years.
The incremental protection is to be deposited into a Refinery Upgradation Account for approved modernisation projects.
The policy is intended to encourage refinery upgrades, reduce dependence on imported petroleum products and strengthen Pakistan’s energy security.
Euro-V upgrade gathers pace
ATRL is pursuing a comprehensive plant upgrade to improve product quality and meet Euro-V fuel specifications.
A planned Continuous Catalyst Regeneration (CCR) unit is expected to significantly enhance premium motor gasoline (PMG) production, improve pool octane to Euro-V standards, eliminate the need for octane-boosting additives and reduce naphtha exports.
The company also plans to revamp its existing Diesel Hydro Desulphurisation (DHDS) unit to enable the production of Euro-V diesel with a maximum sulphur content of 10 parts per million (ppm).
The overall upgrade project is estimated to cost approximately US$600 million.
Licensor front-end engineering design (FEED) studies for the CCR and DHDS projects have been completed, while ATRL has appointed Studi Technologie Progetti SpA (STP), Italy, for FEED and Project Management Consultancy (PMC) services.
The FEED package is approximately 90 percent complete, with deliverables covering management, process, mechanical, civil, electrical and instrumentation disciplines being finalised.
Meanwhile, expressions of interest have been issued to prospective engineering, procurement, construction and commissioning (EPCC) contractors. Leading international companies have responded positively, while cost estimation and tender preparation are progressing simultaneously.
New deep conversion refinery under evaluation
In a potentially significant development, ATRL is also assessing a 50,000 BPD deep conversion refinery.
The proposed facility remains conditional on the sustainable availability of additional local crude from northern Pakistan and the necessary government support.
If pursued, the project would represent a major expansion of ATRL’s refining footprint and could increase the company’s capacity to utilise domestic crude and produce petroleum products.
Sales and price differentials
The annual report also highlighted changes in ATRL’s sales-related price differentials.
The PMG RON differential declined 14.6 percent year-on-year to Rs1.25 billion. The differential reflects the prescribed price gap between PSO’s imported 92 RON PMG and ATRL’s 91 RON PMG sold during the year under OGRA directives.
The HSD Euro-V price differential fell 9.6 percent year-on-year to Rs951 million. This represents the amount payable under OGRA directives relating to the HSD Euro-III and Euro-V price differential claim.
As a result, combined price differentials declined 12.5 percent year-on-year to Rs2.21 billion, modestly reducing deductions from gross sales.
However, customs duties surged 43.6 percent year-on-year to Rs19.4 billion, primarily because the HSD customs-duty surrender rate increased from 2.5 percent to 5 percent under the amended Brownfield Refinery Policy.
Based on estimates cited in the annual report analysis, ATRL surrendered approximately Rs3.7 billion, equivalent to around Rs34.3 per share on a pre-tax basis, in HSD customs duty due to the delayed signing of the agreement.
ATRL’s long-term expansion strategy
ATRL’s latest plans combine near-term refinery optimisation with a broader modernisation programme.
While the US$600 million Euro-V upgrade is progressing through the engineering and contractor-selection stages, the proposed 50,000 BPD deep conversion refinery could provide another significant avenue for long-term expansion if sufficient local crude supplies and government support are secured.