Essar Oil Ltd, which is close to tripling the capacity of its Vadinar refinery in Gujarat to 34 million tonne (MT) by 2010-end, is yet to firm up plans on whether to make its unit an integrated refinery-cum-petrochemicals unit.
While most of the upcoming and recently commissioned refineries in the public and private sector such as Indian Oil?s Panipat refinery or Reliance Industries Jamnagar refinery have been integrated with petrochemical units, Essar is yet to take a call in this regard. ?We are still working out our petrochemical plans and will take a decision at an appropriate time,? Essar Oil?s CEO Nareh Nayyar told FE.
On the refinery front, Essar?s 10.5 MT refinery in Gujarat is currently operating at 12.5 MT capacity. ?We plan to raise this refining capacity to 16 MT by June 2010 and will put an additional plant of 18 MT capacity by December 2010,? Nayyar said.
EOL is investing Rs 3,200 crore in raising Vadinar capacity to 16 MT and another Rs 6,000 crore in the brown-field expansion project. ?We have set for ourselves a target of having a refining capacity of one million barrels per day (bpd) (50 MT). We will have 700,000 bpd at Vadinar (by end-2010) and for 300,000 bpd, we are looking at opportunities outside India,? he said.
The company is also looking at the possibility of owning a refinery abroad. Talks are already on with the Kenyan government over a mega refinery project and Nayyar said the company is separately exploring some green field refinery options in the Mediterranean region. ?But these are early stages,? he said.
On the retail front, Nayyar said Essar Oil was looking at setting up fuel distribution network in certain countries to sell products from Vadinar. ?We are looking at countries were products can be moved economically. This means some countries in the Middle-East, Indian sub-continent and most of Africa,? he said.
Post expansion, Vadinar will be able to produce petrol and diesel meeting Euro-V and strict California specifications. Nayyar said the refinery would be configured to process all kinds of heavy, high acid and high TAN crudes, which are priced lower than premium low sulphur crude oils and give better margins.
Vadinar would have Nelson Complexity index of 12.8 (higher the complexity the greater is the ability of the refinery to process the so-called dirty crudes). ?The refinery will be able to process any crude and produce products meeting specifications of any market,? he said.
Post-expansion, Vadinar would be the largest producer of Euro-V petrol and diesel from a single refinery location in the world. He said the company would sell most of the diesel in domestic market and export half of petrol and fuel oil from the refinery. LPG and kerosene from the refinery would be entirely sold domestically.