Essar Oil has completed phase I of its Vadinar refinery expansion in Gujarat that takes its capacity to 18 million tonnes per annum.
Naresh Nayyar, chief executive office, Essar Energy, said the company will optimise capacity up to 20 million tonnes by September this year.
LK Gupta, managing director and chief executive officer, Essar Oil, told Hindustan Times that about 60% of production will be consumed in the domestic market while the rest will be exported in the near future. With Vadinar producing Euro IV and Euro V-compliant diesel and petrol, Essar targets mature markets such as Europe, Australia, New Zealand and US.
“Consumption is growing in the domestic market,” said Gupta. “We hope to sell 100% of our production in the domestic market since many of the refineries will go out of production.”
“Petrol consumption in the country is growing at 11% and diesel consumption at 8%,” he added.
Essar has invested Rs 23,000 crore to build the Vadinary refinery. The original plan was to build a capacity to produce 38 million tonnes of oil per annum.
“I am not able to tell you when we will start next phase of expansion,” Gupta said. “Once we achieve the optimum capacity realisation, our focus is to create value for our shareholders.”
Gupta said that going forward, Vadinar refinery will produce aviation turbine fuel (ATF) as well.
With requirement for heavy crude going up due to the improved refinery complexity, substantial quantity of crude will be procured from Latin American countries such as Venezuela, Brazil, Colombia and Mexico.