New Delhi, Nov. 10: Essar Oil today said it would almost double the capacity of its Vadinar oil refinery in Gujarat to 20 million tonnes by September 2012.

The Vadinar refinery has a nameplate capacity of 10.5 million tonnes per annum. “The refinery is operating at a throughput of 14 million tonnes,” Essar Oil said in a statement.

At present, the company is implementing a project to expand this capacity to 18 million tonnes. However, it has now decided to raise the capacity to 20 million tonnes instead.

“As on October 31, the Phase-I expansion (to 18 million tonnes) was 72 per cent complete and is on track for mechanical completion by March 2011, with the exception of two units that are delayed by a quarter,” the statement said.

“The company has now decided to expand the refinery’s capacity by a further 2 million tonnes to 20 million tonnes,” it said.

The higher capacity will be achieved through optimisation of some of the units at an estimated cost of Rs 1,700 crore by September 2012.

“There has been a significant growth in Indian demand for petro products in the last few years and we see the trend continuing over the next few years. Augmenting our refining capacity by an additional 2 million tonnes per annum will help us capture this growing demand at a very competitive capital cost,” said Naresh Nayyar, managing director and chief executive officer.