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Will complete expansion projects worth $4.9 bn in 2011: Essar
New Delhi, May 17, 2011 (PTI) London–listed Essar Energy Plc today said it is on track for completion of expansion projects in the oil and power sector worth USD 4.9 billion in 2011.
“The USD 1.8 billion Phase-1 expansion project to increase Vadinar refinery (in Gujarat) capacity from 300,000 barrels a day to 375,000 bpd remains on track for completion this year,” the company said in a statement.
Ramp-up of the new units will commence in Q3, 2011, and the majority of the increased production is expected from Q4, 2011, which will also significantly increase the complexity of the refinery, allowing it to process much heavier varieties of crude oil and improve margins.
“A further optimisation project to increase capacity to circa 405,000 bpd by September, 2012, is also on track,” it said.
Essar said three other power generation projects with a cumulative capacity of 2,910 MW remain on track for completion in Q3 and Q4 of this year.
The commissioning of these projects will almost treble the electricity generation capacity of the company from 1,600 MW to 4,510 MW.
“These are the Salaya-I, Mahan-I (both 1,200 MW) and Vadinar-P2 (510 MW) power plants. Salaya and Vadinar are in Gujarat and Mahan in Madhya Pradesh,” the statement said.
Essar said it is also on track to complete its USD 350 million acquisition of the Stanlow Refinery in UK from Shell during the second half of 2011.
“An extraordinary general meeting of Essar Energy shareholders will be called soon to approve the transaction, which was agreed with Shell in late March,” it said.
The company has been adjudged provisional winner for an onshore oil block in the Cambay Basin in Gujarat. The CB-ONN-2010/11 block was offered in the ninth round of bidding under the New Exploration Licencing Policy (NELP) recently.
Essar owns 17 oil and gas blocks in India, Nigeria, Vietnam, Australia, Indonesia and Madagascar.
The firm”s Vadinar refinery earned USD 8.71 on processing every barrel of crude oil in Q1 of 2011, up from the USD 5.82 per barrel gross refining margin (GRM) earned in the same period a year before.
“This rise in GRMs has been driven by an ongoing increase in demand for petroleum, diesel and other refined products in India and elsewhere, which recently has been further accelerated by rising demand in Asia due to some of the Japanese refineries being out of action following the tsunami and also due to the turmoil in the Middle East,” it added. PTI ANZ ARV