Just a month after announcing plans to build a refinery in Khyber-Pakhtunkhwa, the country’s largest oil marketing company Pakistan State Oil (PSO) has planned to acquire a stake in UAE-based Fujairah Refinery.

The joint venture acquisition of the Middle East refinery project is in its initial stages, PSO Managing Director Naeem Yahya Mir told the Senate Standing Committee on Petroleum and Natural Resources on Wednesday.

PSO’s two-year old plan to enter the refining business has finally made some headway. The company’s first attempt was to enter the refining business by increasing its share in Pakistan Refinery, however, after analysing the deal for a year the management decided not to go forward with it.

In June, Khyber-Pakhtunkhwa (K-P) allotted 400 acres to PSO for establishing a refinery. The proposed refinery will produce 40,000 barrels per day, only 7,000 barrels less than one of the largest local players, Pakistan Refinery Limited.

Oil marketing companies across the globe have entered the refining business to increase profits, a model PSO wants to emulate, said Mir.

The refining sector is relatively more profitable than the selling part in the energy chain, according to experts. The energy sector includes four main units” exploration, production, refining and selling.

Senate Standing Committee on Petroleum and Natural Resources was briefed by PSO management on its future plan at the Parliament House on Wednesday.

PSO also plans to establish a regional joint venture aviation company in the Middle East with Pakistan National Shipping Corporation.

“PSO will procure two large ships to import crude oil,” he said adding that Pakistan is currently facing huge cost on account of import of crude oil through small ships. He said that Port Qasim was congested and blockage of only one ship at the port can freeze the entire supply to Pakistan.

“We will have an alternate route of oil supply other than the port in Karachi,” he said.

“With the inception of K-P refinery, PSO will also have the option to export oil to Afghanistan,” he said.