Ruia: Planning big

Mumbai, Nov. 24: Essar Oil has started operations at its petroleum refinery at Vadinar in Gujarat. The plant will start its 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.

This comes four months ahead of the originally scheduled date of commissioning — March 31, 2007. Essar Oil expects a full-capacity production in the next two quarters.

According to reports, Essar Oil is planning to enhance the refinery capacity to around 60 million tonnes over the next few years.

Though the refinery’s project cost is put at Rs 10,826 crore, Essar Oil feels that this figure is competitive and lower than estimated costs for a greenfield refinery.

The refinery will produce petrol and diesel suitable for India as well as advanced international markets. It will also produce liquefied petroleum gas (LPG), naphtha, light diesel oil, aviation turbine fuel and kerosene. It has been designed to handle a range of crude — from sweet to sour and light to heavy.

Essar Group chairman Shashi Ruia said, “We are delighted at the successful commissioning of Essar Oil’s refinery at a time when India is strengthening its presence in international 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 economy. The early commissioning is also a tribute to the employees and the group’s business associates for their efforts.”

According to Essar Oil, the refinery comes at an opportune time to fill the gap between worldwide demand and supply in petroleum. Currently, refineries world over are operating at over 98 per cent capacity utilisation. 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 is supported by infrastructure like utilities, terminals, crude intake and product evacuation facilities. These include the Vadinar Oil Terminal, which can receive crude through a single-point mooring system and dispatch finished petroleum products through its product jetty. Vadinar Power Company generates 120 mw at its co-generation plant and feeds both power and process steam for the refinery.