Officials say Pakistani oil refineries only have capacity to process 30 percent Russian crude oil

The file photo posted on September 20, 2021 shows Cnergyico Pakistan Limited's oil refining complex in Hub, Balochistan. (Cnergyico Pk Limited/Facebook)
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Updated 29 July 2022
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Officials say Pakistani oil refineries only have capacity to process 30 percent Russian crude oil

  • Experts estimate energy imports from Russia could save Pakistan about $3 billion yearly
  • Refinery officials say Pakistan’s plans to import oil from Russia will not disrupt Gulf imports

KARACHI: Officials at refineries in Pakistan have said given “technical and operational constraints,” the South Asia country can only process up to 30 percent of Russian varieties of crude oil, as Pakistan explores cheaper import options and experts warn a deal with Moscow could become a new source of friction between Pakistan and the United States.

Pakistan’s energy ministry last month sought recommendations from industrial experts and major local refineries on importing crude oil from Russia, asking for input on the technical suitability of crude grades, quantity and transportation of freight in comparison with imports from the Middle East. The government specifically sought advice on “payment methodology” in case of crude oil import and “existing commitment to upliftment from the Arab Gulf region with respect to term contracts.”

Pakistan’s energy and power ministers did not respond to repeated Arab News queries about the government’s plans following responses by refineries to the energy ministry’s letter.

But several Pakistani oil refinery officials interviewed by Arab News said they had informed the government in their replies the main problem with a deal with Moscow was that only up to 30 percent of Russian crude could be processed at local refineries, given their current configuration.

“The current configuration of plants supports up to 30 percent of Russian oil refining due to technical and operational constraints,” a top official at a local refinery, who spoke on condition of anonymity, said.

“But the real problem is how the payments would be made under present circumstances and how their LCs [letters of credit] would be processed as Russian banking channels are closed for international payments.”

A number of Pakistani refineries said they had informed the government they could only process certain grades of Russian crude, including Sokol, Sakhalin Light and Eastern Siberian Pacific Ocean (ESPO).

“Byco has responded to the government and we have said that Byco can refine Russian oil but there are limitations,” said Mohammad Wasi Khan, chairman of the Cnergyico petroleum refining company, formerly known as Byco.

Officials at petroleum refineries also said they had apprised the government of supply constraints as some coastlines were located far away and it would take about 16 to 22 days to deliver oil to Karachi.

On the other hand, Pakistani financial analysts estimate energy imports, including crude oil and refined products from Russia, could save Pakistan about $3 billion a year.

“Russians can also provide petrol, diesel, crude oil, and liquefied natural gas [LNG],” said Samiullah Tariq, director of research at the Pakistan-Kuwait Investment Company. “Assuming it’s at a 25 percent discount from prevailing market rates, Pakistan can save more than $3 billion annually,” he added.

Pakistan’s oil imports during 11 months of the last fiscal year, from July 2021 until May 2022, rose by 99 percent to $19.7 billion, including $10 billion imports of refined products and $4.7 billion worth of crude.

As Pakistan evaluates the costs and benefits of Russian oil imports, experts said since Pakistan had no pre-existing contract to buy oil from Russia, it would be hard to expect exemptions from international sanctions.

“It is very unlikely that a new contract by Pakistan will get such exemption,” Husain Haqqani, a scholar at the Hudson Institute in the US, told Arab News. “It will not be easy for Pakistan to pay for the oil, to get insurance for tankers that ship it, and to handle the consequences of violating sanctions.”

“The United States and western Europe will not be happy if Pakistan violates sanctions and starts buying oil from Russia in the midst of Ukraine war,” he added. “Given that US-Pakistan relations are already strained, this would be a new source of tension, which is completely avoidable.”

Analysts and refinery officials also said despite Pakistan’s plans to import oil from Russia, it would continue to secure its petroleum imports from Gulf countries.

Refinery officials said they would fulfill long-term contracts made with the Gulf region’s oil producers and assured that the supply from the region would not be disturbed.

“Three refineries have long-term contracts with Gulf oil producers and as the refineries have confirmed they can refine only 30 percent Russian oil, it means the rest of the volume will come from the Gulf region,” the refinery official, who wished to remain anonymous, said.

Some experts also believe Pakistan may be in a position to gradually import Russian oil despite pressure from Washington.

“In order to secure its energy [needs], Pakistan can buy cheap Russian oil, and despite American pressure, Islamabad can continue importing oil from Russia to some extent, but I think Islamabad will eventually be able to import cheap Russian oil,” Dr. Umud Shokri, a Washington-based senior foreign policy adviser and energy strategist, told Arab News.

“Despite pressure from the US, India has continued to buy cheap oil from Russia, while China’s oil imports from Russia have also increased due to the energy crisis and the increase in oil prices,” he said. “Energy consuming countries such as Pakistan want to diversify their energy sources and buy oil and gas. The Russian embargo has caused countries to increase the import of cheap Russian oil.”

The option of crude imports from Russia came into the limelight after now ousted premier Imran Khan, who arrived in Russia in February the day it launched a full-scale invasion of Ukraine, said Moscow was willing to offer oil at cheaper rates to Pakistan.

Pakistan’s Finance Minister Miftah Ismail, who is in the new cabinet of PM Shehbaz Sharif, has rubbished Khan’s claims and said Islamabad would be willing to buy oil at cheaper rates from Russia only if Moscow made the offer and Islamabad didn’t have to face sanctions on the deal.


Pakistani bank signs LC Confirmation deal with International Islamic Trade Finance Corporation

Updated 05 November 2024
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Pakistani bank signs LC Confirmation deal with International Islamic Trade Finance Corporation

  • This product facilitates trade flow by allowing exporters and issuing banks to gain assurance from the ITFC
  • It will support private sector clients by working with banks in Organization of Islamic Cooperation states

ISLAMABAD: Meezan Bank, a leading Islamic bank in Pakistan, has signed a new strategic partnership with the International Islamic Trade Finance Corporation (ITFC) under its Letter of Credit (LC) Confirmation product to support the private sector, the Pakistani bank said on Tuesday.
This product facilitates trade flow by allowing exporters and issuing banks to gain assurance from the ITFC, a member of the Islamic Development Bank (IsDB) Group, to secure payment and thus eliminate credit risks, according to a statement issued by Meezan Bank.
It will support private sector clients, including small-medium enterprises (SMEs), by working with local banks in the Organization of Islamic Cooperation (OIC) member countries to facilitate various import transactions.
The agreement was signed by Nazeem Noordali, Chief Operating Officer of ITFC, and Syed Amir Ali, Deputy Chief Executive Officer of Meezan Bank, in the presence of executives from both sides.
“Today marks a significant milestone in our business relationship with ITFC as we solidify our partnership. This arrangement reinforces our Bank’s commitment to reliability, stability, and financial excellence,” said Syed Amir Ali, Deputy Chief Executive Officer of Meezan Bank.
“The Letter of Credit Confirmation Agreement strengthens our position in the market, enabling us to capitalize on new opportunities and facilitate international Islamic trade.”
Meezan Bank is the first bank in Pakistan to partner with ITFC for the LC Confirmation facility. It will enable the Pakistani bank to extend geographical coverage by leveraging the ITFC network, both in member and non-member countries. It will also enable the Bank to handle LC Confirmation transactions of up to 12 months.
“We are proud to strengthen our partnership with Meezan Bank through this Letter of Credit Confirmation Agreement, which reflects our commitment and support to private sector clients in our member countries,” M. Nazeem Noordali, Chief Operating Officer of ITFC, was quoted as saying by Meezan Bank.
 


Pakistani actors Mahira Khan, Humayun Saeed starrer ‘Love Guru’ to release on Eid

Updated 05 November 2024
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Pakistani actors Mahira Khan, Humayun Saeed starrer ‘Love Guru’ to release on Eid

  • The movie will be directed by industry veteran Nadeem Baig and also feature actor Ahmed Ali Butt
  • Pakistani cinema has witnessed a revival over the past decade with the release of a number of movies

ISLAMABAD: Pakistani superstar Mahira Khan has said that her new film ‘Love Guru’ will be released on Eid next year, which will feature her alongside actors Humayun Saeed and Ahmed Ali Butt.

Khan, who will be playing the female lead alongside Saeed, said the movie is directed by Nadeem Baig. Both Khan and Saeed appeared together in the Pakistani film ‘Bin Roye’ nine years ago, with fans admiring their chemistry on screen.

“There is one project that we are shooting for the past month,” Khan told reporters at an event in London. “It’s film Love Guru that will be released on Eid.”

The actress expressed happiness and thanked her fans for the amount of love she received in London.

Khan has made a mark in international cinema with her performances in ‘The Legend of Maula Jatt’ (2022) and Bollywood flick ‘Raees’ (2017) alongside Shah Rukh Khan. Her acting skills in the two movies were widely praised by critics and made her a household name in Pakistan and India.

Pakistani cinema industry has witnessed a revival over the past decade with the release of a number of movies, including ‘Zinda Bhaag’ (2013) and ‘Ho Mann Jahaan’ (2016), which were based on a mix of traditional and modern themes.

The success of these films has led to an increase in investment in movie production, with many new films being released each year.


Pakistan, China conclude bilateral air exercise to bolster interoperability

Updated 05 November 2024
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Pakistan, China conclude bilateral air exercise to bolster interoperability

  • The exercise simulated various military tactics in near-realistic, multi-domain operations
  • Pakistan is separately holding a joint military exercise, Harimau-Markhore II, with Malaysia

ISLAMABAD: Pakistan and China on Tuesday concluded a bilateral air exercise aimed at strengthening interoperability between the two air forces, the Pakistani military said.

The Indus Shield-Chinese exercise, a bilateral module of the Indus Shield 2024 military exercise, concluded at an operational air base of Pakistan Air Force (PAF), according to the Inter-Services Public Relations (ISPR), the Pakistani military’s media wing.

It witnessed participation from People’s Liberation Army Air Force with its personnel and high-tech equipment comprising Active Electronically Scanned Array (AESA) radar, J-16 and J-10C fighter with Beyond Visual Range (BVR) equipment, HQ-22 surface-to-air defense system, Potent Airborne Electronic Warfare YTG-9 Platform, and the KJ-500 airborne early warning system pitched against the PAF’s J-10C and JF-17 Block-III fighter jets simulating contemporary aerial combat scenarios.

“The successful execution of such a large-scale exercise demonstrates Pakistan Air Force’s joint operational readiness among allied nations while addressing contemporary security challenges,” the ISPR said in a statement.

“Aimed at validating interoperability between China and Pakistan in the face of contemporary air combat challenges and by simulating various military tactics in near-realistic, multi-domain operations training environment, Indus Shield-Chinese has maximized the warfighting potential of both the participating air forces.”

Indus Shield-2024 is the largest multinational regional exercise, with Saudi Arabia, Egypt and Turkiye among 24 countries taking part in it. The exercise aims to foster interoperability and training through state-of-the-art facilities.

Pakistan is separately holding a joint military exercise, Harimau-Markhore II, with Malaysia, Pakistani state media reported on Tuesday. The two-week-long exercise began at the National Counter-Terrorism Center in Pabbi in Pakistan’s northwestern Khyber Pakhtukhwa (KP) province.

“The exercise will strengthen bilateral relations between the Malaysian and Pakistani forces and provide opportunities to benefit from each other’s experiences and expertise in the future,” the Radio Pakistan broadcaster reported.

Pakistan frequently holds exercise drills with regional and international allies to foster interoperability and joint deployment concepts to strengthen regional and global security.

Also, Pakistan Navy Ship (PNS) Zulfiquar visited Port Djibouti during deployment on a regional maritime security patrol, the Directorate General Public Relations (DGPR) of Pakistan Navy said on Tuesday.

The commanding officer of PNS Zulfiquar called on senior military leadership and explored avenues for further collaboration, while the crew had professionally rewarding interactions with Djibouti Navy and Coast Guards during the port call.

“Pakistan and Djibouti enjoy close and cordial relations based on mutual respect and understanding. Both the countries also have numerous common interests in maritime arena,” the DGPR said in a statement. “Upon departure, PNS Zulfiquar conducted Passage Exercise with Djibouti Coast Guards to enhance inter-operability.”


Pakistan approves Hajj Policy 2025, adds new role to improve pilgrim services

Updated 05 November 2024
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Pakistan approves Hajj Policy 2025, adds new role to improve pilgrim services

  • Pakistan will send 179,210 pilgrims, equally divided between the government and private sector
  • Government will prioritize first-time pilgrims in the official balloting process, says a statement

ISLAMABAD: Pakistan’s federal cabinet on Tuesday approved the Hajj Policy 2025, said an official statement, specifying a quota of 179,210 pilgrims and introducing a new position of the “nazim” or administrator to ensure improved services for those embarking on the spiritual journey.
Hajj, one of Islam’s five pillars, is an annual pilgrimage to Makkah undertaken by millions of Muslims. Pakistan has one of the largest Hajj quotas provided by Saudi Arabia to any Muslim country amid immense demand for the pilgrimage, with many citizens waiting years for an opportunity to participate.
“The federal cabinet approved the Hajj Policy 2025 on the recommendation of the Ministry of Religious Affairs and Interfaith Harmony,” an official handout from the Prime Minister’s Office said. “The cabinet was informed that Pakistan’s Hajj quota for 2025 will be 179,210, divided equally between the government and the private sector.”
The new policy includes the creation of a “nazim” position, aimed at ensuring the well-being of pilgrims throughout the journey.
“For every 100 pilgrims, one nazim will be appointed from the welfare staff,” the handout added, underscoring the government’s intent to improve the pilgrimage experience.
Under the policy, children under 12 will not be allowed to travel for Hajj. Government quota allocation will be conducted through computerized balloting, with 1,000 seats reserved for hardship cases and 300 for laborers or low-income employees registered with the Workers Welfare Fund or the Employees Old-Age Benefits Institution.
Additionally, the Makkah Route Initiative, offering streamlined immigration services, will be available at Islamabad and Karachi international airports. To further enhance the experience, Hajj Group Organizers will sign service agreements with the Ministry of Religious Affairs, with close monitoring of service quality.
In light of previous challenges, the cabinet has increased compensation for pilgrims who may pass away or get injured during the pilgrimage. The families of deceased pilgrims will receive Rs1 million to Rs2 million, while injured pilgrims will receive Rs1 million in compensation.
A specialized Hajj management app has also been developed to support pilgrims, along with extensive training initiatives.
The cabinet directed priority in the balloting process to first-time pilgrims and emphasized the importance of ensuring top-quality services for all participants.


Pakistan government defends bills extending tenure of armed services chiefs

Updated 05 November 2024
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Pakistan government defends bills extending tenure of armed services chiefs

  • Parliament has approved bills to extend tenure of army, navy, and air force chiefs from 3 to 5 years
  • Opposition fears extending tenure will consolidate the hold of already all-powerful army chief

ISLAMABAD: Defense Minister Khawaja Asif has defended the passage this week by Pakistan’s parliament of bills that extend the tenures of the army, navy and air force chiefs, saying the move would check against services chiefs granting themselves extensions and “formalize” the duration of their service.

The bills, approved by Pakistan’s National Assembly and Senate on Monday, have been pushed by the coalition government led by Prime Minister Shehbaz Sharif which argues that they are aimed at building continuity and avoiding some of the political turmoil that usually surrounds the appointment of the army chief every three years. The bills also extend the tenure of the heads of the navy and air force, though those positions hold less influence in Pakistan.

The office of the army chief is considered to be the most powerful in the country, with the army having ruled Pakistan for almost half of its 75-year -long history. Even when not directly in power, the army is considered to be the invisible guiding hand in politics and holds considerable sway in internal security, foreign policy, and economic affairs, among other domains. Several army chiefs in the past have been given extensions in service.

“What we did [passage of bills], these extensions [in army chief’s term] started from Ayub Khan’s time,” Defense Minister Khawaja Asif said, referring to a Pakistani general who carried out a military coup in 1958 and ruled until 1969.

“That thing has been formalized now, and we have increased the tenure. You pick up the rest of the institutions. [...] the National Assembly [term] is also for five years.”

“Now the trend of extensions, how it was in the past that people gave an extension to themselves [will be ended],” Asif added, referring to now retired Gen Qamar Javed Bajwa, who served as army chief from 2016-22 after getting a three-year extension.

Speaking to a Pakistani news channel, Information Minister Ataullah Tarar also said the uncertainty surrounding the army chief’s appointment had been addressed through the new legislation.

“The five-year tenure [of the services chiefs] will not affect the institution’s merit-based system … The amendments are not introduced suddenly, instead the consultation on them was underway, and this legislation is not done for any individual.”

OPPOSITION STANCE

As the bills were passed on Monday in the National Assembly, opposition lawmakers from the PTI party of imprisoned former Prime Minister Imran Khan chanted against the measure. Some of them tore up copies of the bills and threw them at Speaker Ayaz Sadiq for not allowing debate. A similar protest by lawmakers from Khan’s party took place when the bill was quickly passed by the Senate, where Sharif’s party also holds a majority. The bill will now go to the president for his approval.

Omar Ayub Khan, a top leader of Khan’s Pakistan Tehreek-e-Insaf party, or PTI, told reporters after the bill passed that the legislation “is neither good for country nor for the armed forces.”

The PTI is widely believed to be against an extension in service particularly for incumbent Army Chief Gen. Asim Munir, who it considers to be behind the ouster of Khan from the PM’s office in a parliamentary vote of no-confidence in 2022. The PTI also says the army is behind legal cases against Khan that have kept him in prison since August last year. The military denies any interference in politics.

The passage of the new bills follows controversial amendments made to the constitution last month, granting lawmakers the authority to nominate the chief justice of Pakistan, who previously used to be automatically appointed according to the principle of seniority.

The amendments allowed the government to bypass the senior-most judge of the Supreme Court, Justice Mansoor Ali Shah, and appoint Justice Yahya Afridi as the country’s top judge.

The opposition and the legal fraternity had opposed the amendments, arguing that they were aimed at granting more power to the executive in making judicial appointments and curtailing the independence of the judiciary. The government denies this.