Essar Oil to acquire pipeline, oil terminal from BP for up to $100 million

Under the deal, Essar will acquire equity stake in UK Oil Pipeline, a share of the contractual JV with Shell

Essar Oil UK said in an announcement on Wednesday that it has signed an agreement to acquire a few assets owned by energy major BP. The deal includes a stake in the UKOP pipeline, a contractual joint venture and ownership of an oil terminal.

The total investment in the acquisition of these assets is pegged at $75 million to $100 million, and will take Essar Oil’s total investment in building its United Kingdom (UK) business to $1 billion, the company said. In its statement, Essar Oil added that it remains committed to further investments in this geography and will look for newer inorganic growth opportunities.

Under the agreement with BP, Essar will acquire an equity stake in the UK Oil Pipeline (UKOP), a share of the contractual joint venture (with Shell) which runs the Kingsbury Terminal and a 100 per cent interest in the Northampton Terminal. Essar Oil owns and operates the Stanlow Refinery, which produces 16 per cent of UK road transport fuel.

“The acquisition will allow Essar to maintain its presence in a very competitive UK Midlands region and grow that current footprint.  In addition, we will continue to expand our retail offering – with a number of the 12 new stations we recently branded through an agreement with MPK being supplied from the two terminals,” said S Thangapandian, chief executive officer for the company.

Part of its fuel retail expansion plan, the company plans to grow its network to 400 retail sites over the next five years, with 67 Essar branded UK retail sites already operational across England and Wales.