Essar Oil Limited on Friday announced the successful beginning of operations at its Vadinar petroleum refinery 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 current phase of commissioning comes four months ahead of the originally scheduled date of March 31, 2007. Essar Oil expects to attain production at full capacity in the next two quarters, a company statement said.
The company said that the project cost of Rs 10,826 crore ($2.4 billion) is extremely competitive and lower than estimated costs for a green field refinery. The refinery has been built with state-of-the-art, contemporary technology and will have the capability to produce petrol and diesel suitable for use in 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 diverse 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 global 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 Indian economy. The early commissioning is also a tribute to the employees of the Essar Group and its business associates for their unstinted efforts”.
The refinery comes at a most opportune time and will fulfil the gap between world-wide demand and supply in the petroleum sector. Currently, refineries the world over, are operating at over 98 percent capacity utilisation. Significantly, 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.