KARACHI: China Export & Credit Insurance Corporation (Sinosure) has committed to financing $1 billion for Pakistan Refinery Limited’s (PRL) expansion project. This announcement came during Petroleum Minister Musadik Malik’s recent visit to China, accompanied by officials from both government and private sectors, including PRL representatives.

Sinosure, a state-backed insurance provider, specializes in covering non-payment risks and facilitating China’s foreign economic engagements. Its financing of this project is on behalf of Chinese banks, adhering to Chinese laws that restrict direct bank financing.

PRL’s Refinery Expansion & Upgrade Project (REUP) aims to double its crude processing capacity from 50,000 barrels per day (bpd) to 100,000 bpd. The project, estimated at $1.7 billion, will incorporate advanced deep conversion refinery technology.

Sources revealed that Sinosure has committed to the financing after due diligence and the appointment of an engineering, procurement, construction, and finance (EPCF) contractor. The expanded refinery will meet stringent environmental standards, including the production of EURO V compliant fuels.

The REUP represents a significant investment in Pakistan’s energy infrastructure, enhancing operational efficiency and contributing to economic growth. The local refinery upgrade is in line with the government’s brownfield refinery policy, although delays persist due to fiscal policies exempting sales tax on petroleum products.

A parliamentary panel recently stressed the urgency of refinery upgrades, citing health risks from substandard fuel production, and warning of a bleak future for local refineries if upgrades are not implemented.