Iraq offers Pakistan Oil on long term payment facility
Friday, 17 February 2012 | 00:00
Dr Asim Hussain, Special Assistant to Prime Minister, during a press conference revealed that Iraq has put forth a proposal to Pakistan. In the proposal, Iraq will lend Pakistan furnace oil with the facility of long term payment.
Hussain further revealed that a delegation from Pakistan will soon be sent to Iraq to negotiate the terms of the contract.
However, the Special Assistant said that the problem at current point of time is that Pakistani oil refineries operate on low sulphur oil and the refineries will have to be upgraded to refine the Oil from Iraq.
He said, “Oil refineries in Pakistan are designed to refine low sulphur oil and therefore an upgrade or new refineries will be needed to process Iraqi oil.”
The Special Assistant said that the Government is focused towards upgrading the refineries in Pakistan. Hussain said, “Pakistan Petroleum Limited (PPL) is going to launch its exploratory operations in Iraq with an investment of $100 million.”
Pakistani Oil refineries are currently operating at 120-160 Centistokes (CST) sulphur oil, while they need to be operating at 380 CST sulphur oil, if they want to utilize Iraqi oil. The low sulphur oil refined by Pakistani oil refineries costs $20 per ton more than 380 CST sulphur oil.
Hussain said, “Now we want to convert power plants to use 380 Centistokes (CST) sulphur oil and Hub Power Company (Hubco) has expressed willingness in this regard. The up-gradation will help save up to $20 million to $30 million a year.”
Pakistan is one of those countries which majorly produces electricity through Oil and lately the power sector is facing problems in the regular supply of furnace oil because of the circular debt.
Oil suppliers refused to lend more oil until their outstanding payments were not paid thus the countries power production took a severe hit. However, with the availability of oil from Iraq the deficit can be minimized.
Source: News Pakistan
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