KARACHI: Pakistan’s government and Pakistan Refinery Limited (PRL) have opened funding discussions with Saudi Arabia, China and international financial institutions for a $2 billion refinery expansion project, an official familiar with the matter said.
The project aims to double PRL’s crude oil processing capacity from 50,000 barrels per day to 100,000 barrels per day at its Karachi facility, while upgrading output to Euro-V fuel standards.
PRL operates under Pakistan State Oil, which holds a majority stake in the refinery. The expansion forms part of Islamabad’s Brownfield Refinery Policy, a broader plan to modernise the country’s five existing refineries and improve domestic fuel production.
According to officials, the upgrade is expected to take about three years, with 60 to 70 percent of the required financing to be raised through debt. The remaining amount may be covered through equity participation from potential investors.
Government sources said Pakistan is engaging Saudi investors directly, while PRL is coordinating with Chinese authorities, export credit agencies and global commercial banks to secure funding.
Once financing is finalised, the refinery plans to move toward financial close by late 2026, with construction expected to begin in early 2027.
The expansion is intended to reduce Pakistan’s dependence on imported petroleum products and strengthen energy security. Pakistan imported fuel worth billions of dollars last fiscal year, putting pressure on foreign exchange reserves.
Separately, Petroleum Minister Ali Pervaiz Malik recently held meetings with international investors during a visit to Saudi Arabia, where he briefed stakeholders on refinery modernisation plans.
PRL officials said technical evaluations with engineering contractors have been completed, with contract signing targeted for early 2026.
Industry analysts say upgrading domestic refining capacity could help Pakistan limit exposure to global fuel price swings and improve supply stability.
