Essar Oil's 10.5 million tonne Vadinar refinery goes on stream

Our Corporate Bureau
24 November 2006

Mumbai: Essar Oil Ltd started operations at its petroleum refinery at Vadinar in Gujarat four months ahead of schedule. The plant has started trial production with a capacity of 7.5 million tonnes per annum of crude, which will gradually go up to 10.5 million tonnes per annum. The company expects to attain production at full capacity in the next two quarters.

Essar Oil said that the project cost is extremely competitive being lower than estimated costs for a green field refinery.

The state-of-the-art refinery has the capability to produce petrol and diesel as per international standards. It will also produce LPG, naphtha, light diesel oil, aviation turbine fuel and kerosene. The Rs 10,826 crore ($2.4 billion) refinery has been designed to handle a diverse range of crude - from sweet to sour and light to heavy.

"We are delighted at the successful commissioning of Essar Oil's refinery at a time when India is strengthening its presence in global markets and integrating with the global economy. The refinery signals our commitment to the nation to be a strong and dominant force in core sectors of the Indian economy. The early commissioning is also a tribute to the employees of the Essar group and its business associates for their unstinted efforts," said group chairman Shashi Ruia.

The refinery comes at a most opportune time and will fulfill the gap between worldwide demand and supply in the petroleum sector. Refineries the world over, currently, are operating at over 98 per cent capacity utilisation. Significantly, there has been no addition to refining capacities in the last three years and planned new capacities are not expected to come up before the end of 2008.

Essar Oil's refinery has dedicated infrastructure like utilities, terminals, crude intake and product evacuation facilities.