Essar commissions diesel hydrotreater unit at Vadinar

Unit will make company capable to produce Euro V grade diesel

Essar Group-owned Essar Oil Ltd has commissioned a diesel hydrotreater unit-I (DHDT-I) at its Vadinar refinery in Gujarat, a company statement informed on Tuesday. The unit would ensure that the diesel produced at the refinery will be capable of meeting Euro V specifications.

The company informed that the phased commissioning of three additional units is slated for the end of this month, which complete the phase-I of expansion by March 2012. This would add nine new units thereby expanding the capacity to 18 million tonner per annum (MTPA) (375,000 barrels per day) and enhance complexity to 11.8 from 6.1 currently.

"With this commissioning, Essar Oil's capital expenditure programme is beginning to taper downwards and will see substantial pick up in revenue and profitability of the company going forward," the company said in the statement.

Commenting on the commissioning of the unit, L K Gupta, MD and CEO, Essar Oil, said, "We have now commissioned two key units that will help us produce gasoil (diesel) and gasoline (petrol) conforming to international standards. We are very close to realizing the scale that we had set out to achieve for the Vadinar Refinery. The increased complexity that we will have post expansion will give us greater flexibility to produce higher value fuels that have a growing market both in India and overseas." The unit at Vadinar refinery will upgrade diesel quality by treating the sour diesel streams and achieving reduction in sulphur. Earlier, EOL had commissioned an isomerization unit at the refinery making the refinery capable of producing gasoline of high octane rating and almost zero sulphur content.

Market for low sulphur content fuel is rapidly expanding, with 20 top Indian cities requiring retailing of only Euro-IV compliant fuels. In the EU (European Union), the Euro V standard has been applied since 2009.

Euro IV norms require cleaner fuels that have very low sulphur content-less than 50 ppm (parts per million). The equivalent of Euro IV in India is BSIV (Bharat Stage IV). Per an official notification, as of 1 April 2010, all motor vehicles in the top 13 Indian cities (by population) are required to comply with BSIV norms.

Post expansion, the Vadinar refinery will have the flexibility to produce higher value, high-quality products, including pet coke.

Essar Oil shares closed at Rs 59.10 up 2.34 per cent against previous close on the Bombay Stock Exchange (BSE) on Tuesday.