Essar Oil Ltd (EOL) on Thursday said it has renewed a major product sale and purchase agreement with State-owned Bharat Petroleum Corporation Ltd (BPCL).
The four-year agreement, running up to 2016, is for supply of diesel, petrol, kerosene and ATF (aviation turbine fuel) to BPCL from EOL's refinery at Vadinar in Gujarat.
It also entitles EOL to purchase products from BPCL and gives the two companies the option of sharing each other's distribution infrastructure, Mr S. Thangapandian, CEO – Marketing, EOL, said in a statement here.
Essar Oil has emerged as the biggest supplier of fuels to BPCL. EOL has similar product sale and purchase agreements with two other leading oil marketing companies from the public sector, namely Indian Oil Corporation Ltd (IOC) and Hindustan Petroleum Corporation Ltd (HPCL).
Essar Oil recently completed the Phase-I expansion project at Vadinar at a capital expenditure of Rs 8,300 crore, increasing its capacity from 14.7 million tonnes a year to 18 mt a year.
A further optimisation project, currently under way, will increase capacity further to 20 mtpa by September.
The Vadinar Refinery, amongst the most complex refineries globally, has the flexibility to produce higher value, high-quality products, including gasoline (petrol) and Gasoil (diesel) conforming to Euro IV and V norms, that have growing acceptance in both domestic and international markets.