Essar Oil completes Vadinar refinery expansion

Our Bureau Updated - March 12, 2018 at 12:54 PM.

Mr Naresh Nayyar (right), CEO, Essar Energy, and Mr L.K. Gupta, MD & CEO, Essar Oil, at a press conference in Mumbaion Thursday. — Shashi Ashiwal

Essar Oil Ltd has completed the Rs 8,300-crore capacity expansion of its Vadinar refinery. This will help increase the company's revenue by 35 per cent at current crude prices, said Mr Naresh Nayyar, CEO of Essar Energy, at a press conference on Thursday .

In the current fiscal, the revenue is expected to be Rs 55,000 crore, he said.

Essar Energy is the parent company of Essar Oil.

The refinery has now reached an annual capacity of 18 million tonnes (mt). The capacity expansion gives the refinery the capability to process much heavier crude oil. The share of ultra heavy crude, which is currently 20 per cent of the crude basket of the refinery, will go up to 60 per cent. As a result, the overall share of heavy and ultra heavy crude will go up to 80 per cent of the refinery's total crude basket.

Heavy crude

The company has already entered into long term crude sourcing contracts with global suppliers, including several national oil companies from Latin America.

Mr Nayyar said that since ultra heavy crude is available at a discount in the international market, it will help achieve higher refining margins. Due to sourcing of crude from Latin America, the refinery's dependence on Iranian crude has also decreased.

The company has also tied up with Cairn India for sourcing heavy crude. It gets 30,000 barrels a day from Cairn but in the coming year that requirement will go up significantly.

Refinery optimisation is also under way so that its capacity increases from 18 mt to 20 mt (405,000 barrels a day) by September.

In terms of product yield, the Vadinar refinery now has the flexibility to produce higher value, high quality products, including gasoline (petrol) and gasoil (diesel) conforming to Euro IV and V norms, which have growing acceptance in both domestic and international markets.

Mr Nayyar added that in the short-term, India will have a refining capacity surplus with several of the public sector companies' expanded capacities coming on stream. But a shortfall for diesel is expected by 2015-16.

>rahulw@thehindu.co.in

Published on March 29, 2012 16:30