ARL on verge of closure

ISLAMABAD: Attock Refinery Limited (ARL) is likely to stop operations within the next 7-8 days due to higher stocks of Furnace Fuel Oil (FFO) as the refinery is now operating on 60 per cent capacity, which may also hit supply of J-1 to Islamabad Airport and JP-8 to Pakistan Air Force, well informed sources told Business Recorder.

The main reason for the higher stocks of furnace oil is that the country’s electricity requirement is about 12,000-MW due to which the government is not allowing operations of furnace oil-fired power plants.

“If situation remains unchanged with respect to upliftment of FFO, refinery will close its operation in next -7-8 days, which also implies non supply of JP-1 and JP-8 as two plants of refinery have already been shut,” the sources added.

On November 10, 2022, ARL noted that it is confronted with serious challenges due to multiple issues including high Furnace Fuel Oil (FFO) inventory (34,365 MT stocks on November 10, 2022 with barely

10days’ ullage before a complete refinery shut down).

“Refinery was operating at 92 per cent capacity at the time of letter of November 10, 2022 which is now operating on 60 per cent,” the sources continued.

On November 10, 2022, ARL intimated that its crude receipts have been reduced from 43,000 bpd to 25,000 and further reduction is anticipated in view of no upliftment by power section. ARL argued that in case of no receipts of crude oil from the field, ARL will completely shut down in 6-8 days. Moreover, in case of ARL shutdown due to non-availability of crude oil, associated gas supplies from crude oil fields shall be severely impacted resulting in mass reduction ofabout400 mmcfd of gas to the SNGPL system.

ARL further noted that its normal daily crude receipts are about 43,000 bpd which have already been restricted to 25,000 bpd and further reduction is being anticipated in case of closure of roads from Khyber Pakhtunkhwa (KPK) area to its crude decanting facility at Khaur, Attock District, due to prevailing law & order situation in the country.

ARL has also cautioned that in case it is shut down due to non-availability of crude oil, associate gas supplies from the crude oil fields shall be severely impacted resulting in mass reduction of about 400 mmcfd of gas to the SNGPL system. PTI’s announced gathering at Rawalpindi and sit in at Faizabad will halt supply to OMCs.

Power Division, sources said, is expected to start operation of Attock Gen Limited, IPP, to ease concerns of ARL—MUSHTAQ GHUMMAN