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September 1, 2006 at 3:24 am #4149
MUMBAI (Reuters) – Essar Oil Ltd. has pushed back the start-up of a new refinery to October, from August-September, but has already purchased 1 million barrels of Algerian crude for September delivery, company officials said.
The cargo was bought from the spot market, said one official, who did not wish to be identified.
“We are going to look for many such spot cargoes within days of starting our refinery,” the official told Reuters.
Earlier on Monday an Essar spokesman said the company will start its new $2.2 billion refinery in phases from October onwards, instead by August-September as previously expected.
The refinery will process 150,000 barrels per day (bpd) initially and then ramp up to 210,000 bpd by March 2007, the spokesman said.
Shares in Essar closed 1.2 percent lower at 41.90 rupees, paring most of the day’s gains in a firm Mumbai market.
Essar’s refinery, which has been planned for almost a decade, is located in Vadinar in Gujarat.
The official said two crucial units — a fluid catalytic cracker and diesel hydro desulphuriser — were expected to go on stream only by March 2007.
Other units such as a crude distillation unit, a vacuum distillation unit and a sulphur unit will go on stream by October, the official said.
The plant will run on a mix of about 70 percent low sulphur and 30 percent high sulphur crude once it reaches full capacity, he said.
Gujarat is also the location for a 660,000-bpd refinery owned by Reliance Industries Ltd., India’s top private oil and petrochemicals firm.
Reliance is setting up another 600,000-bpd export-oriented refinery next to the present one, to be run by Reliance Petroleum Ltd., in which oil major Chevron Corp. holds a 5 percent stake with an option to raise it to 29 percent.
India aims to emerge as a global oil refining and export hub in the next six years to match its growing energy needs as the economy surges ahead with 7-8 percent annual growth, and plans to expand its refining capacity at a time when many Western oil majors are still reluctant to invest.
China, which has three times India’s oil demand, is charting a more cautious course, restricting refining capacity expansion to match expected demand growth of about 6 percent a year.
By Hiral Vora
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