Attock refinery shuts main crude unit as road closures disrupt oil movement

ISLAMABAD: Attock Refinery Limited (ARL) has shut its main crude distillation unit after road closures disrupted the movement of oil tank lorries to and from the facility, according to a mandatory regulatory filing submitted to the Pakistan Stock Exchange (PSX) and the Securities and Exchange Commission of Pakistan (SECP).

ARL, described as the only oil refinery in the northern part of the country, said the restrictions had affected both the receipt of crude oil and the dispatch of refined petroleum products. The refinery serves fuel demand across most of central and northern Punjab, Khyber Pakhtunkhwa, Azad Jammu and Kashmir, and Gilgit-Baltistan.

In its filing, the company said its main crude distillation unit, HBU-I, with a capacity of 32,400 barrels per stream day, had been shut until traffic restrictions ease. Stocks of Motor Spirit (MS) and High-Speed Diesel (HSD) had risen sharply because products could not be dispatched, while crude receipts had also fallen significantly.

"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. 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," it was stated.

The filing was made under clause 5.6.1 of the PSX Rule Book and sections 96 and 131 of the Securities Act, 2015, read with Notification SRO. No. 143(1)/2012. ARL also asked the exchange to circulate the information to trading right entitlement certificate holders.

Over the past week, the refinery had written separately to the Petroleum Division and the Oil and Gas Regulatory Authority (Ogra), seeking facilitation for the movement of oil tankers. In those letters, ARL said roads for oil tank lorries were to remain closed from April 18 to April 26 because of the expected arrival of foreign delegates in Islamabad.

The company said it receives crude from oilfields in Khyber Pakhtunkhwa and the Potohar region and plays an important role in supplying petroleum products to the northern region and beyond. This includes aviation fuel for Islamabad and Peshawar airports, fuel support for the armed forces, and furnace fuel oil for independent power producers to help address electricity shortages.

ARL had warned the authorities that any sudden stoppage of tanker movement during the period would severely affect crude receipts and interrupt the supply of refined products to retail outlets, airports and defence-related needs. It had also cautioned that a prolonged disruption could force a reduction in refinery throughput and eventually lead 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," it stated.

According to informed sources cited in the report, the disruption could also force the shutdown of most oil production in Punjab’s Jhelum and Attock region, as well as nearly all fields in Khyber Pakhtunkhwa, and may create structural challenges.

Nashpa crude also affected

The development comes days after the state-run Oil and Gas Development Company Ltd (OGDCL) announced the start of commercial production from Baragzai X-01 (Slant) in the Nashpa Block in Kohat district of Khyber Pakhtunkhwa, which it described as the country’s largest oil and gas discovery from a single well.

OGDCL had said the well had become its highest-producing well and was contributing around 10 per cent of the company’s total crude oil output. Petroleum Minister Ali Pervaiz Malik had formally inaugurated the start of commercial production.

According to OGDCL, the well added 5,300 barrels of oil per day, 17 million standard cubic feet per day of gas, and 15 tonnes per day of liquefied petroleum gas, taking cumulative production from the well to 15,000 barrels per day and 45 million standard cubic feet per day of gas. The company said output was expected to rise to 25,000 barrels per day and 60 million cubic feet per day of gas in the near future.

Crude from the Nashpa field is transported to ARL for refining. OGDCL had estimated daily revenue from the Nashpa block at Rs156 million, with projected monthly revenue of Rs4.7 billion and annual revenue of Rs57 billion. It also said the production would generate annual foreign exchange savings of about $329 million by reducing dependence on imported fuels.