Essar Oil renews product pact with Indian Oil Corporation
25 Nov 2011
Essar Oil Limited has renewed its product sale and purchase agreement with Indian Oil Corporation Limited (IOC) for three-years from 2012 to 2015.
Under the agreement, Essar Oil will supply diesel, petrol, kerosene and ATF (aviation turbine fuel) to IOC from its Vadinar Refinery, totalling 2 million tonnes every year.
The agreement, which also entitles Essar Oil to purchase products from Indian Oil in a mutual sharing of the distribution infrastructure, comes in the wake of a change in the government's stance on fuel pricing.
Essar Oil has similar product sale and purchase agreements with two other leading oil marketing companies from the public sector, namely Bharat Petroleum Corporation and Hindustan Petroleum Corporation.
The contract with Indian oil will be Essar's largest fuel supply contract. Essar is currently completing a phase 1 expansion project at its Vadinar refinery, which will increase capacity from 14.7 million tonnes a year to 18 million tonnes (375,000 barrels per day) by March 2012. A concurrent optimisation project will increase capacity further to 20 million tonnes (405,000 bpd) by September 2012.
''I am delighted that we are building on the long-term relationship that we share with IOC. Once the ongoing expansion project is completed, our Vadinar refinery will be able to serve our PSU customers better, especially in terms of meeting the growth in domestic demand for BSIV / Euro IV grade fuels,'' S Thangapandian, CEO – Marketing, EOL, said.
