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Essar plans spend $300MM Upgrading UK Stanlow Hvy Oil Upgrade

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This topic contains 6 replies, has 2 voices, and was last updated by  Charles Randall 9 years, 6 months ago.

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  • #2308

    basil parmesan
    Participant

    Essar Energy to spend $300 mln on upgrading Stanlow refinery
    London, Apr 11, 2011 (PTI) Essar Energy will spend 300 million pounds on upgrading its newly acquired Stanlow refinery in Cheshire, the UK, as part of a plan to become a global leader in the refining industry, media here reported.

    The Indian company would equip Stanlow with new kit to process ultra-heavy crude oil from Venezuela, Russia and Nigeria, ”The Times” reported.
    Essar also planned to expand Stanlow shipping terminal on the Mersey to provide a UK entry-point for diesel and petrol produced at the Vadinar refinery in Gujarat.
    One of the largest refineries in Asia, Vadinar is in the midst of a USD 1.7 billion expansion that will enable it to produce Euro V fuel.
    There is no market in India for the high-grade diesel, but it is now mandatory in the EU, where there is a shortage of the fuel.
    Stanlow, which Essar bought for 215 million pounds last month, can refine 270,000 barrels of North Sea light crude a day, making it one of Europe”s seven top refineries, but it is running at about 75 per cent capacity. Essar plans to run it at 100 per cent capacity to cut cost of processing each barrel.

  • #5148

    Charles Randall
    Participant

    Here is update on Essar purchase of UK’s Stanlow Refinery. News claims Stanlow is planning spend $300 MM to upgrade for heavy oil but its too little for adding new coking unit. The stated goal is increase utilization from 75% closer to 100% Capacity to lower cost per barrel processing. But you need to read between lines.
     
    Amid upgrade claims, the article also mentions one real reasons for purchase Stanlow -be able make UK imports of diesel/product from it’s India Vadinar Refinery  that is process of a 2x & 3X expansion which IS adding coker in Phase I & another Phase II.
     
    Not sure UK refinery can run above 75% and be dumping ground for India product exports into EU/UK markets (where Euro V Fuel – LS Diesel that Vadinar can make but has no market in India).
    Regards

  • #5147

    Charles Randall
    Participant

    Vadinar plant expansion to help Essar process variety of crude
    New Delhi
    , Apr 4, 2011 (PTI) Essar Oil”s expansion of its Vadinar refinery in Gujarat to 18 million tons this year will help the firm turn wider variety of crudes into fuel, lifting its margins, JP Morgan said in a research note on the company.
    Essar is expected to complete the first phase of its refinery expansion project in Q2 of 2011-12 fiscal, with capacity rising from about 14 million tons currently to 18 million tons.

    Post the expansion to 18 million tons (and then to 20 million tons in FY13/14), Essar Oil”s refinery Nelson Complexity Index will rise to 11.8 (from 6.1) with addition of significant secondary processing capacity – enabling it to capitalise on structurally strong diesel spreads.
    “More importantly, the complexity of the refinery will rise from 6.1 to 11.8, significantly boosting Essar Oil”s ability to process tougher crudes, and achieve a more desirable product slate,” it said.
    Widening light-heavy crude differentials would benefit the firm going forward, aiding it to earn a greater premium over benchmark regional gross refinery margins (GRMs).
    “We expect Essar Oil GRMs to average USD 8.5 per cent over FY12-13, as the company benefits from added high value product sales and takes advantage of light-heavy crude differentials,” it said.
    An increase in Nelson complexity allows a refinery to process a wider variety of crudes, and allows the refiner the opportunity to optimise its product slate, increasing production of higher value light and middle distillates.
    “With an increase in complexity from 6.1 to 11.8, Essar Oil will optimize production of diesel and gasoline – leading to an increase in GRMs from the average of USD 5-6 per barrel in the past to about USD 8.5 a barrel post the expansion,” JPMorgan said.
    Essar”s Vadinar refinery currently processes about 30,000 barrels per day of crude from Cairn India”s Mangala field in Rajasthan. “Post the refinery expansion, the refinery would be able to process 60,000 bpd of Mangala crude. This would allow the company to save on transportation costs and taxes adding about USD 0.5-1 per barrel to GRMs.”
    The company expects to commence commercial sales of coal bed methane (CBM) gas from the Raniganj field in West Bengal this month. “At a plateau production of 3.5 million standard cubic meters per day for 12 years, we estimate an NPV of USD 270 million for this asset,” JP Morgan said.
    “We upgrade Essar Oil to Overweight, with a March 2012 price target of Rs 160,” it added.
    ————-
    Essar defers shutdown of Vadinar refinery

    Mar 28, 2011   By OGJ editors
    HOUSTON, Mar. 28, 2011 — Essar Energy will defer a 35-day shutdown related to expansion of its 300,000 b/d Vadinar refinery in Gujarat, India, to keep products flowing to Asian markets jolted by unrest in the Middle East and the earthquake and tsunami in Japan.
    Privately owned Essar, Mumbai, said it received requests from its major state-owned Indian customersBharat Petroleum Corp. Ltd., Hindustan Petroleum Corp. Ltd., and Indian Oil Corp. Ltd.to sustain operations through the scheduled shutdown period in May and June. Of particular concern, the company said, is supply of gas oil.

    The shutdown now will occur in September and October, after Indias monsoon season.  Essar said timing of first-phase expansion to 375,000 b/d of distillation capacity wont be affected. The project includes upgrades of the crude, vacuum distillation, visbreaker, and fluid catalytic cracking units and installation of vacuum gas oil hydrotreating, diesel hydrotreating, delayed coking, and isomerization units.

    Last November the company said it would boost distillation capacity further to 415,000 b/d via optimization of new and existing units (OGJ, Nov. 15, 2010, Newsletter).
    Ramp-up of the new units is to begin in the third quarter. Most of the increased production will be on stream in the middle of the fourth quarter.
    A second, as-yet unscheduled phase of expansion would add 375,000 b/d of distillation capacity

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  • #5146

    Charles Randall
    Participant

    Here are couple updates on the Vadinar Refinery expansion & coker additions that forgot to post  but go along with Essar UK Stanlow purchase since it provides background on the diesel exports from there to UK.
     

    Essar Vadinar Refinery seems to be following path of its Gujarat neighbor Reliance Jamnagar Refinery on rapid expansion & coker addition.
     
    Here are couple updates  (one PTI 4/5 & one OGJ 3/28) on the continued Essar Vadinar expansion although the coker addition is not mentioned per sae it does talk about increase complexity ~doubling and capacity refinery tripling. The refinery completed its Phase 1 $1.8B expansion from 10.8 MM mtpy (210 MBD) to the 14 MM mtpy (320MBD), later 18 (375MBD) and 20 MM mtpy (415 MBD) it talks about here by Sept 2012 for a complexity increase to 11.8 with an unmentioned coker addition (is mentioned OGJ S/D plans) for Phase 1. The previous mentioned key process licensors for added units were UOP, Jacobs Engr. & ABB. (ABB Lummus coker technology has been sold to CB&I now CB&I-Lummus Coker Technology). 
     
    But it has delayed the Phase II $4.8B expansion to 20MM mtpy  by 2013/14 and then later 34 MM mtpy (680 MBD)), with another expansion and coker addition to  maintain the complexity increase.
    Regard

  • #5087

    it is so experience

  • #5076

    Charles Randall
    Participant

    Will complete expansion projects worth $4.9 bn in 2011: Essar
    New Delhi
    , May 17, 2011 (PTI) Londonlisted 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

  • #5075

    Charles Randall
    Participant

    Here is May update on the Essar Vadinar Refinery which still seems to be following path of its Gujarat neighbor Reliance Jamnagar Refinery for a rapid expansion & coker additions. It also mentions Trippling Power Plant Capacity & the purchase of UK Stanlow Refinery (also see post 4/11 Essar spend $300k Stanlow).
     
    It is very similar to previous Mar/Apr updates  (one PTI 4/5 & one OGJ 3/28) about the continued Essar Vadinar expansion although the coker addition is not mentioned per sae – it does talk about increase complexity ~doubling and capacity refinery tripling.
     
    The refinery has completed its Phase 1 $1.8B expansion from 10.8 MM mtpy (210 MBD) to the 14 MM mtpy (320MBD), later 18 (375MBD) and 20 MM mtpy (410-415 MBD) it talks about here by Sept 2012 with a complexity increase to 11.8 with an unmentioned coker addition (but was mentioned OGJ S/D plans) for Phase 1. The previous mentioned licensors for added units were UOP, Jacobs Engr. & ABB. 
     
    Doesn’t mention the delayed Phase II $4.8B expansion to 20MM mtpy  by 2013/14 or the later expansion 34 MM mtpy (680 MBD)), with another coker addition to  maintain the complexity increase.
    Regards   

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