Essar Oil to raise Vadinar refinery capacity

Essar Oil Ltd (EOL) is set to undertake further capacity expansion of its Vadinar refinery in Gujarat. Essar Oil, which currently operates a refinery in Vadinar at a throughput of 14 million metric tonnes per annum (MMTPA) is planning to take up the capacity to 20 MMTPA.

The company is currently implementing a project to expand this capacity to 18 MMTPA (375,000 bpsd), as part of the Phase I expansion of the refinery. As on 31 October 2010, the company has completed 72 per cent of Phase 1 expansion and is well on track for mechanical completion by March 2011, with the exception of two units that are delayed by a quarter, Essar Oil stated in a press release."There has been a significant growth in Indian demand for petro products in the last few years and we see the trend continuing over the next few years. Augmenting our refining capacity by an additional 2 million tonnes per annum will help us capture this growing demand at a very competitive capital cost. Based on our internal studies, the optimisation project is expected to result in a very strong economic performance for the refinery," said Naresh Nayyar, managing director and chief executive officer of Essar Oil Ltd.

The company has now decided to further expand the refinery’s capacity by two million tonne to 20 million tonne. This will be achieved through optimisation of some of the refinery units at an estimated cost of Rs 1,700 crore (USD 380 million); the project will be completed by September 2012. The move follows a detailed project review that identified several opportunities to de-bottleneck the refinery and revamp some of the units at an extremely competitive capital cost.

The optimisation project entails the revamp of six refinery units: FCCU (Fluid Catalytic Cracking Unit), DHDS (Diesel Hydro Desulphurisation) Unit, SWSU (Sour Water Stripping Unit), DHDT (Diesel Hydrotreater), VGO-HDT (Vacuum Gas Oil Hydrotreater) and DCU (Delayed Coker Unit).