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Essar to expand refinery, make Euro-V fuels
The country’s second biggest private oil refiner, Essar Oil Ltd, has decided to expand the capacity of its 10.5 million tonnes-per-annum (MTPA) Vadinar refinery in Gujarat to 18 MTPA by March 2011. This is 12.5 per cent more than the capacity planned earlier but within the original project cost of Rs 7,810 crore, reports HT Correspondent.
The country’s second biggest private oil refiner, Essar Oil Ltd, has decided to expand the capacity of its 10.5 million tonnes-per-annum (MTPA) Vadinar refinery in Gujarat to 18 MTPA by March 2011. This is 12.5 per cent more than the capacity planned earlier but within the original project cost of Rs 7,810 crore.
Speaking to Hindustan Times from Singapore, Essar Oil CEO Naresh Nayyar said, “After the expansion, our 18 MTPA refinery at Vadinar will start producing the Euro-V compliant petrol and diesel in the country.”
Essar’s refinery, he said, was geared to meet the new auto-fuel specifications in the Indian market, which will be effective from April 2009. Production of Euro-III diesel has already started while Euro-III petrol and Euro-IV diesel output would start by March-end.
On expanding the refinery at the same cost, Nayyar said, “We are always looking at opportunities to optimise. Based on the feasibility done by PCS, USA, we are getting Visbreaker installed to raise the capacity to 18 million tonnes.”
In Phase-II of the expansion, Essar Oil plans to add a new 18 MTPA refinery to take the total refining capacity at Vadinar to 36 million tonnes at a cost of $4.4 billion (Rs 20,240 crore).
“The company is expected to tie up for funds for the phase-II expansion by June this year.
“Around $1.6 billion (Rs 7,360 crore) would be equity and $2.8 billion (Rs 12,880 crore) debt. The debt would mostly be domestic loans,” said Nayyar.
In contrast, in the Rs 7,810 crore Phase-I expansion, the promoter equity is Rs 2,000 crore while Rs 1,210 crore is coming from internal accruals and the debt portion is Rs 4,600 crore, most of which is rupee loans. However, Phase II may see a $700 million foreign loan.
Vadinar, which has a design capacity of 10.5 MTPA, is already operating at 14 million tonnes — a capacity utilisation of more than 133 per cent of the rated capacity.
