THE Ruias-owned Essar Oil announced on Friday that they have big plans for the future. The company, which has set up a 10.5 million tonne per annum (mtpa) petroleum refinery in Vadinar, wants to increase the refining capacity by nearly five-fold to 50 mtpa over next three to four years. Essar Oil’s managing director, Naresh Nayyar, said, “We are targeting a refining capacity of one million barrels of oil per day with state-of-the-art technology.” He was addressing an analyst meet in Mumbai.
The company has already embarked on expansion plans to raise its domestic capacity to 34 million tonnes by 2010. For the balance 16 million tonnes, the company is scouting for acquisition targets. The company has approached the government of Kenya for acquiring a four million-tonne refinery in Mombassa and is awaiting their approval. Itwill spend $6 billion to ramp up its Vadinar capacity to 700,000 bpd by 2010. For this, the promoters have already agreed to pump in $2 billion in equity, while financial institutions have committed nearly $4.3 billion of debt. Shortly, the company plans to announce the financial closure of the project. However, it has already started ordering the long lead items to meet tight timelines. The company has commenced commercial operations at its Vadinar refinery since May 1, 2008. “We have already refined one million tonne of crude oil since then,” said the company’s chief financial officer, V Suresh.
The refinery is currently operating at 250,000 barrels per day (bpd) capacity, which is 20% higher than the rated capacity of 210,000 bpd. Since its commissioning in November 2006 the company had been running trial runs to stabilise operations. Post-expansion, Essar Oil will be able to produce Euro IV and Euro V grade of auto fuels. It will have a better product slate and be able to handle sour, heavy and acidic crude oils resulting in substantial improvement in refining margins than its current refinery. Considering the rising demand in domestic markets, the company expects to sell over half of its products in India.
The company is progressing with its petroleum exploration activities with an aim to source 30% of its total refining requirement through its own fields.
The company has already embarked on expansion plans to raise its domestic capacity to 34 million tonnes by 2010. For the balance 16 million tonnes, the company is scouting for acquisition targets. The company has approached the government of Kenya for acquiring a four million-tonne refinery in Mombassa and is awaiting their approval. Itwill spend $6 billion to ramp up its Vadinar capacity to 700,000 bpd by 2010. For this, the promoters have already agreed to pump in $2 billion in equity, while financial institutions have committed nearly $4.3 billion of debt. Shortly, the company plans to announce the financial closure of the project. However, it has already started ordering the long lead items to meet tight timelines. The company has commenced commercial operations at its Vadinar refinery since May 1, 2008. “We have already refined one million tonne of crude oil since then,” said the company’s chief financial officer, V Suresh.
The refinery is currently operating at 250,000 barrels per day (bpd) capacity, which is 20% higher than the rated capacity of 210,000 bpd. Since its commissioning in November 2006 the company had been running trial runs to stabilise operations. Post-expansion, Essar Oil will be able to produce Euro IV and Euro V grade of auto fuels. It will have a better product slate and be able to handle sour, heavy and acidic crude oils resulting in substantial improvement in refining margins than its current refinery. Considering the rising demand in domestic markets, the company expects to sell over half of its products in India.
The company is progressing with its petroleum exploration activities with an aim to source 30% of its total refining requirement through its own fields.
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