13-03-2012

Essar Energy commissions diesel hydrotreater unit at Vadinar refinery

Essar Energy plc, the India-focused integrated energy company, today announced that Essar Oil Ltd has successfully commissioned the Diesel Hydrotreater Unit 1 (DHDT-1) as part of the Phase I expansion at its Vadinar Refinery in India. This leaves just three units remaining to be commissioned as part of the Phase I expansion of Vadinar, which is firmly on track to be completed by the end of this month.

The Phase I expansion involves the addition of nine new units altogether. These will expand the refinery’s capacity to 18 million metric tonnes per annum (or 375,000 barrels per day) and will enhance the refinery’s complexity to 11.8 from 6.1 currently. With this commissioning, Essar Oil’s capital expenditure programme is beginning to taper downwards. The refinery expansion will deliver a substantial pickup in revenues and profitability of the company going forward.

The DHDT-I unit, which has a capacity of four million tonnes per year, will upgrade diesel quality by treating the sour diesel streams and achieving a reduction in sulphur content as well as an improvement in the cetane index. The DHDT-I will thus ensure that the diesel produced at the refinery will be capable of meeting Euro V specifications, as required in the European Union since 2009. The market for low sulphur content fuel is rapidly expanding, with 20 top Indian cities now requiring retailing of Euro IV compliant fuels.

Essar Oil has already commissioned the new Isomerization Unit at Vadinar, the first Phase I expansion unit to be commissioned, which gives the refinery the ability to produce gasoline of high octane rating and almost zero sulphur content.

LK Gupta, managing director and chief executive officer, Essar Oil, said, “We have now commissioned two key units that will help us produce diesel and petrol conforming to international standards. We are very close to delivering 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.”

Alongside the Phase I expansion, an additional optimisation project is also underway at the Vadinar refinery which will further increase capacity to 20 MMTPA (405,000 bpd) by September 2012. The capacity expansion, complexity enhancement and subsequent optimisation will give the Vadinar refinery the capability to process over 80% heavy and ultra-heavy crudes, which are lower cost than light crudes. In terms of product yield, the expanded Vadinar Refinery will have