Essar Energy commissions two additional new units at Vadinar refinery
March 21, 2012: Essar Energy plc [LSE: ESSR], the India-focused integrated energy company, today announced that Essar Oil Ltd has successfully commissioned the new Sulphur Recovery Unit (SRU) and the Vacuum Gasoil Hydrotreating Unit (VGOHDT) as part of the Phase I expansion at its Vadinar Refinery in India.
This means the Delayed Coker Unit (DCU) is the only expansion unit that remains to be commissioned as part of the $1.81 billion Phase I expansion project. The project is now just days away from being fully completed, which will expand the refinery's capacity to 18 million metric tonnes per annum (MMTPA), or 375,000 barrels per day, and enhance complexity to 11.8 from 6.1 currently, among the highest in the world.
The SRU will help the refinery recover 99.9 % of sulphur in acid gases generated from the ARU (Amine Regeneration Unit) and the SWS (Sour Water Stripper), two units that have already been commissioned. The addition of a new SRU plays a key role in helping the refinery meet the latest emissions regulations and will also enable Essar Oil to process sour and opportunity crudes.
The commissioning of these units means Essar Oil's capital expenditure programme is beginning to taper off and will lead to a substantial pick up in revenue and profitability going forward.
LK Gupta, managing director and chief executive officer of Essar Oil, said, "The world today has moved to ultra low sulphur fuels, and refineries that can manufacture such products have a competitive edge. The Vadinar refinery, which is now in the final leg of its expansion programme, will soon be among the world's most complex refineries capable of producing fuels that meet the world's most stringent emission norms. Commissioned units like the isomerisation unit, diesel hydrotreater and the sulphur recovery unit are critical components of a world-class refinery such as ours. They give us the capability to process heavier and tougher crudes and produce high-quality products that find acceptance in both domestic and international markets."
Mr. C. Manoharan, head of refinery, Essar Oil said, "The vacuum gasoil hydrotreating unit will ensure that the refinery is able to achieve a throughput capacity of 18 million tonnes per year. With a capacity of 6.5 million tonnes, the vacuum gasoil hydrotreating unit at Vadinar is among the largest units of its kind. It will help the refinery to produce low sulphur, high octane gasoline. The unit is also capable of producing naphtha, kerosene and diesel."
Essar Oil has also commissioned a state-of-the-art Effluent Treatment Plant (ETP) with a capacity of 540 cubic metres per hour. The ETP consists of primary, biological and tertiary treatment sections to recover the oil and remove pollutants from the effluent water streams generated at different process units, and ensures meeting the environmental norms. The treated water will be reused for the cooling tower or for the generation of demineralised water through the reverse osmosis plant. The treated water can also be used for horticulture.
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 the flexibility to produce higher value, high-quality products, including pet coke.
Notes to editors:
1. Essar Oil Limited is listed on the Bombay Stock Exchange and the National Stock Exchange of India and is a subsidiary of Essar Energy, which owns 87.1 per cent of the shares.
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About Essar Energy
Essar Energy (LSE:ESSR) is a world class, low-cost, integrated energy company with an established track record.
Essar Energy, through its subsidiaries, owns one of India's largest private power producers with 1,600MW of installed capacity and projects under construction to expand its capacity to 9,670MW.
Essar Energy, through its subsidiaries, owns one of India's fastest growing private sector oil and gas companies with a diverse portfolio of exploration and production assets. The Vadinar refinery, located in Gujarat, is India's second largest private sector oil refinery with throughput capacity currently being expanded from 14.7 million metric tonnes per annum to 18mmtpa by March 2012, and with further plans to expand to 20mmtpa by September 2012.
About Essar Group
The Essar Group (the "Group") is a multinational conglomerate and a leading player in the sectors of Steel, Oil, Gas, Power, Communications, Shipping, Ports, Logistics, Construction and Minerals. With operations in more than 25 countries across five continents, the Group employs over 70,000 people, with annual revenues of US$17 billion.
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