Essar bets big on petcoke exports to Pak

After starting petcoke production earlier this year, Essar Oil is looking at export opportunities in neighbouring Pakistan. The company has entered into an agreement with Maple Leaf, a cement major in Pakistan for supply of Petcoke. Essar has so far supplied a consignment of 15,000 tonne to Maple Leaf. 

"Post the Maple Leaf consignment, there have been a few enquiries and we are looking forward to sign more contracts. We would be interested in participating in future export opportunities as and when they arise," said an Essar Oil Spokesperson in an emailed response.

Essar Oil had commenced production of petcoke during April 2012 and the present capacity is 1.8 million tonne per annum, second largest, after Reliance Industries' refinery in Jamnagar.

Petcoke is a by-product derived from processing of heavy crude oil. Due to its high calorific value, Petcoke is not only cheaper than other fuels on a calorific basis but can also reduce fuel costs to a great extent. Fuel cost accounts for around 40 per cent of the cost by the cement industry. Petcoke is also low on moisture content and ash. This results in savings for transportation and freight for the user.

With addition of coking units at refineries in the country and new refineries being commissioned with cokers, the production of petcoke is said to nearly double from the present level of 7.5 million metric tonnes per annum to 14 million metric tonnes per annum in the next three years.

Maple Leaf cement factory is a 11,700 tonnes per day cement plant located in Lahore producing portland and white cement. It is also the largest producer of white cement in Pakistan with 80 per cent of market share.

Indian oil companies are finding Pakistan has a good export destination. Other than Essar, Reliance Industries Ltd (RIL), India's largest private sector oil company, sells around 6,000 tonnes of the polymer every month to Pakistan.

With Pakistan, emerging an important petrochemicals export destination for Indian companies, state-run Indian Oil Corp Ltd plans to sell around 5,000 tonnes of polypropylene to Pakistan every month this year, double the last year’s monthly average. However, IndianOil had been exporting polypropylene to Pakistan after its Panipat naphtha cracker went on stream in early 2010.

Besides, the Bhatinda Refinery, jointly promoted by steel magnate Lakshmi N Mittal and Hindustan Petroleum Corp Ltd is also testing waters in the neighbouring country and has already appointed an agent.