ISLAMABAD: An Abu Dhabi-based international energy company, in collaboration with an Austrian petrochemical firm, has signed an agreement with Pak-Arab Refinery Company Limited (Parco), to explore sustainable fuels and feedstock production in the South Asian country, the refinery said on Thursday.
Oil and energy make up the largest portion of Pakistan's imports bill, with fuel imports draining Pakistan’s foreign reserves, which are currently at a level that barely covers a month’s worth of imports. Soaring fuel prices in the wake of the Russian invasion of Ukraine and a depreciating currency have added to the country’s energy woes.
In 2020, the Pakistani government revised the Renewable Energy (RE) Policy 2019 with the aim to derive 60 percent of energy from renewable sources by 2030 to wean Pakistan’s dependence on imported fuel products.
Currently the country gets 64% of its electricity from fossil fuels, with another 27% from hydropower, 5% from nuclear power and just 4% from renewables such as solar and wind.
Under the agreement signed by Parco, Mubadala Energy, and OMV Downstream GmbH, the companies will explore potential projects to help Pakistan move towards environmentally friendly fuels and methods of power generation.
“Mubadala Energy, the Abu Dhabi-based international energy company, has announced the signing of a Memorandum of Understanding (MoU) with OMV Downstream GmbH (OMV) and Pak-Arab Refinery Limited, to explore opportunities in sustainable fuels and feedstock production in Pakistan,” Parco said in the statement.
The companies will explore the possibility of pursuing projects in circular economy initiatives, including plastics production and recycling, sustainable fuels and feedstock as well as the development of synthetic oil and chemical products, Parco added.
“In line with Mubadala Energy’s strategy to pursue opportunities in new energy sectors and low carbon solutions, the agreement also supports its recently launched sustainability strategy that pinpoints three key priorities: creating a positive environmental impact, supporting responsible operations, and being a partner of choice,” the statement said, adding that the partners also hoped to further support efforts to ensure energy security within key customer centers.
“For OMV, the project supports the company’s net zero emissions targets and is in line with a strategy to become a leading, innovative producer of sustainable fuels and feedstock,” it added.
Parco said the agreement had the potential to position the company as an important player in the circular economy and deepen integration into the chemicals and materials industry, while proactively developing sustainable, low-carbon solutions that helped diversify its business.
The UAE, through Abu Dhabi Petroleum Investments, owns 40 percent shares in Parco.
