By Staff Reporter
KARACHI: A Pakistani refiner has imported the country’s first private-sector shipment of Russian crude oil, taking advantage of Moscow’s discounts on its oil exports after its invasion of Ukraine.
The refiner, Cnergyico, said on Monday that it had received a cargo of about 100,000 metric tons of Urals crude at its single point mooring, which can accommodate large tankers. The crude is to be refined at the company’s refinery in Hub, a southwestern city.
Cnergyico operates the largest refinery in Pakistan, with a capacity of 156,000 barrels per day, accounting for one-third of the national capacity. It is the only refinery with its own single point mooring.
“The processing of the first URAL cargo at one of CP’s refinery marks an important milestone for the company and for the country as well. It demonstrates the company’s capabilities and readiness to refine different types and complexities of crude oil,” the company said in a statement.
“Overall, with its refining capacity, CPL is well positioned to contribute to the energy sector, both domestically and internationally, while stimulating economic growth and development for the country.”
The company said it had conducted due diligence and consulted with external sanctions counsel to ensure that the import did not violate any applicable sanctions.
“Any gasoline and diesel that we produce from the cargo shall be sold in the local market to meet the country’s domestic energy needs,” the statement said. “Cnergyico’s plan is to export the fuel oil to generate foreign exchange for the country.”
Fuel oil, also known as furnace oil, is typically used in industrial boilers, power plants and ship engines. The company said there was ample demand for fuel oil in the global market.
The import of Russian oil marks an important milestone for Cnergyico and for Pakistan, which is facing a foreign-exchange crisis and record inflation. The country has started snapping up crude oil that Russia has discounted after its exports were banned from European markets.
Pakistan’s first cargo of Russian oil, imported by the government, arrived in June and a second government-to-government shipment is under negotiation. The government paid in Chinese yuan for its first import, which went to the state-owned Pakistan Refinery Ltd.
Cnergyico declined to comment on what currency it used to pay for its Russian cargo. Market officials said Cnergyico would also pay in yuan through a letter of credit from a Chinese bank.
Pakistan aims to import 100,000 barrels per day from Russia this year, which would account for the bulk of its total imports and help reduce dependence on product imports. Last year, Pakistan’s total crude imports registered at 154,000 barrels per day.
The benefits of the Russian discounts, however, are being offset by increased shipping costs and the lower-quality fuels produced from the heavy sour Urals crude grade compared with products refined from crude from Pakistan’s main supplier, Saudi Arabia.
Cnergyico said it expects to make the Russian imports viable through the export of furnace oil to generate foreign exchange.
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