Essar Energy wraps up UK refinery buy for $350 mn | business | Hindustan Times
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Essar Energy wraps up UK refinery buy for $350 mn

business Updated: Aug 01, 2011 21:45 IST
HT Correspondent
HT Correspondent
Hindustan Times
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In what will give the Ruias a direct access to the UK markets, the London-based Essar Energy Plc on Monday announced completion of the $350 million (Rs 1,575 crore) acquisition of the Stanlow oil refinery and its associated assets locatednear Ellesmere Port from Shell UK Limited.

The Stanlow refinery is the second largest refinery in the UK with a nameplate capacity of 296,000 barrels of oil a day. It supplies approximately one sixth of the UK's petrol, as well as being a key manufacturer of diesel and aircraft fuel.

"We are very pleased to have completed the acquisition of Stanlow, which is a high quality refinery and is an excellent fit with our refining strategy," said Naresh Nayyar, chief executive, Essar Energy.

"It takes us substantially closer to our objective of a global refining capacity of one million barrels daily. We look forward to making some operational improvements which will optimise production at Stanlow."

Another payment of $916 million (Rs 3,664 crore) has been made to Shell for the stock of crude oil, refined products and certain other inventory items on the Stanlow refinery site. The payment for this stock is being funded from a working capital facility consisting of a three year secured revolving credit facility for $1.5 billion.

The move is also aligned with Essar Energy's strategy to provide options for the export of high value fuel products from its refinery at Vadinar in Gujarat.

Vadinar currently has a capacity of 300,000 barrels per day (bpd) and this will be increased to 375,000bpd under the phase I expansion plan, due to be completed by the end of this year, and to 405,000bpd by September 2012.