ISLAMABAD - Federal Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi Thursday said that negotiations on Iran-Pakistan gas pipeline project are underway with Tehran.

Talking to media, Khaqan Abbasi disclosed that PARCO has decided to establish a refinery with a production of 250000 barrel per day. The Parco board of directors has approved the decision, adding that it will be completed in three to five years, the minister added.

Giving the details, the minister said that due to insufficient refining capacity Pakistan was importing 70 percent of refined oil and therefore the government has tasked Parco refinery to establish a modern plant with a capacity to process 250,000 barrels of oil a day by upgrading Khalifa costal refinery, adding that the plan has been approved by the Parco board of directors.

The minister further said contract of the second Liquefied Natural Gas terminal has been awarded in record time for the import of the LNG. He said new terminal will start working from the mid of the next year.

He said that Pakistan is importing substandard petrol but from October sale of substandard 87 Ron petrol will be barred in country and it will be replaced with Ron 92 standard petrol. The refineries have been upgraded for the new task, he added. Abbasi said that local refineries’ diesel refining plants are not upgraded as per international standards, therefore the ministry has extended timeline for refineries, but it has been directed to Pakistan State Oil (PSO) to import Euro-ii standard diesel from January 2017.

Replying a query, the minister said that a Russian company will start work on the Nawab Shah- Kasur gas pipeline very soon. To another query, he said all the power plants are being supplied uninterpreted power supply.

Khaqan Abbasi revealed that during past three years, 83 oil/gas discoveries were made and as a result over 600 MMCFd of natural gas and 27,000 barrels per day of crude oil production was increased. He said that due to depletion of country’s major gas fields local gas supply was stagnant at 4 BCFD mark, while over the time crude oil production has increased from 63,000 barrels a day to 90,000 barrels a day.

The minister said that Directorate General Petroleum Concessions (DGPC) has cancelled concessional license of local and international oil/gas exploration and production (E&P) companies for not undertaking required work. The Ministry would soon hold second round of bidding for awarding oil/gas exploratory blocks to national and international companies which include 16 cancelled leases, he added.

Pakistan was second leading importer of furnace oil and there is dire need to end this import due to multiple factors: environmental hazards, low efficiency issues.

The Minister said that a Russian company will lay Nawabshah to Kasur gas pipeline and a Chinese company will build LNG terminal in Gwadar.

Power sector at present was consuming 1.4 BCFD of gas and there was no gas shortage for fertilizer plants as well, because of government policies the country at present has 2 million tons of surplus stocks of fertilizer and the country was no more a fertilizer importer, Abbasi said.