bitumen production and market outlook in...

Bitumen Production and Market

Outlook in Pakistan

By

M. ADIL KHATTAK Chief Executive Officer Attock Refinery Limited

7th Middle East Bitumen / Asphalt 2016 May 1 - 3 , 2016

CONTENTS

PAKISTAN BITUMEN MARKET

MAJOR PLAYERS

GRADES AND SPECIFICATIONS

BITUMEN DEMAND SUPPLY SCENARIO

ROAD NETWORK OF PAKISTAN

CHALLENGES & OPPORTUNITIES

CONCLUSION

7th Middle East Bitumen/Asphalt 2016 2

Bitumen in Pakistan

History of bitumen use in Pakistan is much older than history of Pakistan itself

In the Indus Valley, there is a particularly well-preserved water tank which dates back to around 3,000 BC. The stone blocks in the tank's walls are bonded with natural bitumen and there is a vertical bituminous core in the center of the wall . The same principle is used today in modern dam design.

Source: http://www.bitumenuk.com/bitumen.asp


PAKISTAN BITUMEN MARKET


Pakistan Bitumen Market


Source: http://www.factfish.com/

Bitumen Production:

o Pakistan has a world share of 0.2%. o Pakistan is #52 in the world ranking.

Pakistan Bitumen Market


Bitumen Consumption:

o Pakistan has a world share of 0.2%. o Pakistan is #52 in the world ranking.

Source: http://www.factfish.com/

MAJOR PLAYERS

7th Middle East Bitumen/Asphalt 2016

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Major Players - Refineries

o Attock Refinery Limited (ARL)

o The only refinery in Pakistan producing bitumen till mid sixties.

o 150,000 Tons per annum bitumen production capacity.

o Processing indigenous heavy crudes for asphalt production.

o National Refinery Limited (NRL)

o The second refinery with asphalt production unit (Commissioned in 1966).

o 240,000 Tons per annum bitumen production capacity.

o Pak-Arab Refinery Limited (PARCO)

o The third refinery in Pakistan to have asphalt production capability.

o Commissioned bitumen production unit in 2012.

o 175,000* Tons per annum bitumen production capacity.


*Based on 500 ton/day & 350 stream days.

Major Players – Oil Marketing Companies

o Attock Petroleum Limited

o Member of Attock Group of Companies.

o ARL and NRL also members of Attock Group.

o Enjoys group synergy and had 81.5% of bitumen market share during 2014-15.

o PARCO (Pearl) and (TPPL) TOTAL PARCO Pakistan

o PEARL; the brand name of PARCO’s marketing company.

o TPPL is a Joint venture of TOTAL S.A. and PARCO refinery

o Combined market share of both companies was 18.5 % during 2014-15.


9

GRADES AND SPECIFICATIONS


10

Grades and Specifications

Attock Refinery Limited offers following bitumen grades:

Paving Bitumen

PEN Grade (60/70)

PEN Grade (80/100)

Cut back Bitumen

RC-70

RC-250

MC-70

Performance Grade Bitumen

PMB (Polymer Modified Bitumen)



National Refinery Limited offers following bitumen grades:

Paving Bitumen

PEN Grade (40/50)

PEN Grade (60/70)

PEN Grade (70/80)

PEN Grade (80/100)



Pak-Arab Refinery Limited (PARCO) offers following bitumen grades:

PEN Grade Bitumen (60/70, 80/100)

Multi grade Bitumen (30/40, 40/50)

Industrial Bitumen (10/20)


BITUMEN DEMAND SUPPLY SCENARIO


14

Bitumen Demand Supply Scenario

7th Middle East Bitumen/Asphalt 2016 15 Source: Pakistan Oil Report by OCAC

-

50

100

150

200

250

300

350

400

450

500

Bitumen Production and Consumption Trend (Thousand Tons)

Bitumen Production Bitumen Consumption

Bitumen Demand Supply Scenario


Source: Pakistan Oil Report by OCAC

-

50

100

150

200

250

300

350

Bitumen Refineries Production (Thousand Tons)

ARL NRL PARCO Refineries Total

ROAD NETWORK OF PAKISTAN


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Road Network of Pakistan

Steadily increasing; current road network length in Pakistan is around 264,000 kilometers

7th Middle East Bitumen/Asphalt 2016 18 Source: Economic Survey of Pakistan 2014-15.

200,000

210,000

220,000

230,000

240,000

250,000

260,000

270,000

280,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Road network (Kilometers)

Motorways 1,930 Highways 9,555 District/Rural Roads 252,457

Total 263,942

Road Network of Pakistan


Road Network of Pakistan (Roads Paved)

Quality of roads being improved. Currently around 70% of network consists of paved roads.


20

50

55

60

65

70

75

80

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Roads Paved (% of Total Roads)

Source: Economic Survey of Pakistan 2014-15.


o Current road density stands at 33 km/100 sq. km .

o Road density projected to raise up the level of 45 km/100 sq. km by 2018

o Existing road network will increase from around 264,000 km to 358,000 km.

Road Network of Pakistan (Road Density)

Road Network of Pakistan (Roads, Passengers Carried)

Road passengers carried; increasing at an average annual rate of 7%


0

50

100

150

200

250

300

350

1999 2001 2003 2005 2007 2009 2011

Roads, Passengers Carried (Million Passenger-km)

Road Network of Pakistan (Roads, Goods Transported)

Roads, goods transported; increasing at an average annual rate of 11%


0

20

40

60

80

100

120

140

160

180

200

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Roads, Goods Transported (Million Ton-km)

Road Network of Pakistan (Vehicles per kilometer of road)

Vehicles per kilometer of road; increasing at an average annual rate of 6.5%


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-

2

4

6

8

10

12

14

16

18

2000 2002 2004 2006 2008 2010 2012 2014

Vehicles per km of Road

Source: Pakistan Bureau of Statistics

CHALLENGES & OPPORTUNITIES


Challenges & Opportunities (Extreme weather conditions)


26

Challenges & Opportunities (Extreme weather conditions)


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Challenges & Opportunities (Selection of Bitumen Grades)

Paving Grade Bitumen

– 40/50 Grade

– 60/70 Grade

– 80/100 Grade

Performance Grade (PG) Bitumen


Challenges & Opportunities (Selection of Bitumen Grade)

Pakistan is divided into six temperatures zones

PG 70-10 covers more than 70 % of the area

Not produced by refineries.

The closest available grade is PG 76-16 (PMB) from ARL.

Bitumen produced by refineries correspond to PG 58-22 , PG 64-16 and PG 64-22.

In future, NHA to consume PG Bitumen for the development/ rehabilitation of main highways and motorways in the country.

7th Middle East Bitumen/Asphalt 2016 29 Source: Pak. J. Engg. & Appl. Sci. Vol. 8, Jan., 2011



Source: Pak. J. Engg. & Appl. Sci. Vol. 8, Jan., 2011

Source Penetration Grade

Equivalent PG grade

ARL 60-70 PG 58-22

ARL PMB PG 76-16

ARL 80-100 PG 58-22

NRL 40-50 PG 64-16

NRL 60-70 PG 64-22

NRL 80-100 PG 58-22

Summary of Bitumen PG Grading in Pakistan


7th Middle East Bitumen/Asphalt 2016 31 Source: Pak. J. Engg. & Appl. Sci. Vol. 8, Jan., 2011

Required PG Grade

Available Exact Grade

Possible Grade

Availability

Equivalent Penetration

Grade

Remarks

PG 70-10

No

PG 76-16

ARL–PMB

PMB, Polymer Modified may be too hard for PG 70-10 and

may result in cracking

PG 64-10 No PG 64-16 NRL–40/50 Acceptable

PG 64-16

Yes PG 64-16

PG 64-22

NRL–40/50

NRL–60/70

Acceptable

PG 58-16

No

PG 58-22 NRL–80/100

ARL–80/100

ARL–60/70

Acceptable

PG 76-10 No PG 76-16 ARL–PMB Acceptable

PG 58-22

Yes

PG 58-22 NRL–80/100

ARL–80/100

ARL–60/70

Acceptable

Challenges & Opportunities Bitumen and HSFO price de-regulated

HSFO being deficit product; price linked with Arab Gulf market

Asphalt price dependent on demand/supply situation


0

100

200

300

400

500

600

700

800

900

1,000

Jul-10 Dec-10 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16

Ex-Refinery Price Trend (US $/Ton)

HSFO ASPHALT

Challenges & Opportunities (Improved roads network)

Improved roads network is the top most priority of the present government

Road density projected to raise to the level of 0.45 km/sq. km by 2018 against the existing 0.33 km/sq. km

The existing road network to increase from around 264,000 km to 358,000 km.

PG Bitumen to be used for future development/ rehabilitation projects of main highways and motorways in the country.


Challenges & Opportunities China-Pakistan Economic Corridor

2,395 km long China-Pak Economic Corridor (CPEC) connecting Gwadar to Kashghar (China).

Karachi-Lahore Motorway (KLM) 6-lane controlled access.

KLM is part of the CPEC Phase-I.

KLM to serve initially the Economic Corridor to ensure optimal utilization of existing network.


http://www.google.com.pk/url?sa=i&source=imgres&cd=&cad=rja&uact=8&ved=0CAkQjRwwAGoVChMI0LGepd2OxwIVAroUCh1wpw-w&url=http://walizahid.com/2015/02/46b-china-pakistan-economic-corridor-15-years-4-phases-3-routes-51-projects/&ei=GFLAVdDFA4L0UvDOvoAL&psig=AFQjCNEHlYs16v-QaFHK82PunHuNgLqiLA&ust=1438753688163888

CONCLUSION


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Conclusion

Future demand outlook of bitumen is upbeat.

Fast growing vehicle population and freight services; call for improved and long-lasting roads.

Performance grade bitumen- solution to road problems.

Opportunity for foreign investment o PG Bitumen export to Pakistan

o Polymer/alternate chemicals for modifying paving grades to required PG bitumen

Thanks

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