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Essar Vadinar Coking Refinery completes Expansion

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This topic contains 3 replies, has 1 voice, and was last updated by  Charles Randall 8 years, 8 months ago.

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  • #1894

    basil parmesan
    Participant

    Essar Energy completes Vadinar refinery expansion

    Reuters Thu Mar 29, 2012 6:04am EDT (RNS Number : 3477A Essar Energy plc)

    March 29, 2012: Essar Energy plc [LSE: ESSR], the India-focused integrated energy company, today announced that Essar Oil Ltd has completed the $1.81 billion expansion of its Vadinar refinery in India with the successful commissioning of the Delayed Coker Unit (DCU), the final unit to be completed.
    Vadinar, in Gujarat state, is now India’s second largest single-location refinery, with an annual capacity of 18 million metric tonnes per year (MMTPA), or 375,000 barrels per day (bpd), up from 14.7MMTPA/300,000 bpd previously. The refinery also now has a complexity of 11.8, up from 6.1 previously, which makes it among the world’s most complex refineries.
    The capacity expansion and complexity enhancement gives the Vadinar refinery the capability to process a much greater proportion of lower cost heavy and ultra heavy crude oils. The proportion of ultra heavy crude, previously around 20% of the total, will go up to 60% and the combined share of heavy and ultra heavy crude will go up to 80%. The company has already entered into long-term crude sourcing contracts with global crude suppliers, including several national oil companies from Latin America.
    Vadinar now has the flexibility to manufacture higher value products, including gasoline (petrol) and gasoil (diesel) conforming to Euro IV and V specifications, which are increasingly required in both domestic Indian and international markets. Close to 80% of total production will now be higher value light and middle distillates, with 50% of the gasoil and gasoline now meeting Euro IV and Euro V specifications. Essar Oil is targeting export markets such as Australia, New Zealand and north-west Europe, in addition to other countries in the Indian subcontinent. However Essar Oil will continue to market a majority of its products in the domestic market.
    The Vadinar refinery benefits from a fully integrated infrastructure including India’s only captive coal fired power plant, the Vadinar P2 power project, which is now nearing completion and will provide power and process steam. The refinery also has a port, pipelines and tankage with multi modal product despatch facilities through rail, road, and sea, giving it a unique cost advantage.
    Prashant Ruia, interim chairman of Essar Energy, said: “We are delighted to announce the completion of the refinery expansion programme. This expansion will greatly improve our product offering, margins and competitiveness. Our capital expenditure programme is now nearing an end. We have invested close to $5 billion to date in the refinery complex and our cost per complexity barrel is one of the lowest in the industry.”
    Naresh Nayyar, chief executive officer of Essar Energy, said: “After starting commercial production at Vadinar just four years ago, we are proud of achieving a size and scale that can match the best in the world. It underlines our commitment to building a world-class, integrated, low-cost energy company that is focused on India’s energy growth story.”
    LK Gupta, managing director and chief executive officer of Essar Oil, said, “The timely completion of our expansion is a testimony to the untiring commitment of the Essar Oil team as well as teams from other Essar Group companies who worked seamlessly under highly demanding conditions to bring this dream project to life.”
    The refinery expansion project was implemented using Essar Group’s in-house capabilities, notably the construction and overall project management which was handled by Essar Projects.
    The DCU, which is among the world’s largest units of its type, is a key addition to Vadinar because of its ability to convert bottom-of-the-barrel vacuum residue into valuable products such as gasoil, gasoline, and vacuum gas oil. It has capacity of 7.5 MMTPA, and is licensed by CB&I Lummus. The DCU is the world’s largest unit designed by Lummus and also the most advanced to be used in any refinery worldwide, giving the company a higher flexibility to process heavy and ultra heavy crude and produce high value products.
    Alongside the expansion, an optimisation project is also underway at the Vadinar refinery that will further increase the capacity to 20 MMTPA (405,000 bpd) by September 2012.
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  • #4666

    Charles Randall
    Participant

    Here is update on completed Essar Vadinar Coking Refinery expansion. The refinery has been expanded to 375 MBD (18 MM TPA) and added a 140 MBD (7.5 MMTPA) coker <CBI-Lummus Coker license ~> reportedly largest CBI has designed. Article also mentions optimization also ongoing to expand capacity to 405 MBD/20MMTPA to complete by Sept 2012.

    The expansion of Essar Vadinar is Phase I expansion and Phase II will follow with an additional coker by 2014

    So far this is at least 3 CBI-Lummus Licensed Cokers completing 1Q2012 (Lukoil Perm, HPCL-Mittal Bhathinda & Essar Vadinar).

    Regards

  • #4658

    Charles Randall
    Participant

    Energy and Power 04 Apr 2012
    Essar To Stop Fuel Oil Exports Soon
    Essar is likely to cease fuel oil exports as early as May after starting a new delayed coker unit at its Vadinar refinery last week

    Essar Oil is likely to cease fuel oil exports as early as May after starting a new delayed coker unit (DCU) at its 375,000 barrels per day Vadinar refinery last week, industry sources said on Wednesday. “Essar will stop exporting fuel oil, but spot offers may still be made when margins are really good,” a source familiar with the matter said.

    “Most of Essar’s volumes head into the Middle East bunker market anyways. In terms of impact, the market is not short on supply at the moment,” a trader said. It was originally expected that fuel oil exports would be halted by the end of 2011, but the new unit had not been stablised by then, sources said.

    Essar’s cargoes were on-specificaton 380-centistoke grade and traders were initially worried about the impact that this loss would have on the availability of cargoes that could be sold directly into the marine fuel market.

    However, the sulphur requirement for marine fuel has since changed, with a 3.5 percent limit imposed to meet international requirements under the MARPOL convention. “But with the sulphur limit now lowered to 3.5 percent, Essar’s cargoes at a maximum guaranteed 4 percent may require some blending as well,” another source added.

    The refiner normally offers two spot cargoes of between 60,000-80,000 tonnes of 380-centistoke a month since 2011, which accounts for more than a third of India’s total spot exports. On top of that, it also has a three-month term offering to provide one cargo monthly since last July.

    Essar was last seen selling an early April loading cargo to U.S.-based trader Cargill, with no new tender offering made since.
    With the addition of the new DCU, the refinery would be able to convert bottom-of-the-barrel vacuum residue into higher value products such as gasoline, gasoil and vacuum gasoil (VGO) instead, the company said in a news release.

    Essar’s fuel oil output after the expansion will be “very small”, CEO Naresh Nayyar had told Reuters last July.

    The Phase I expansion of its Vadinar refinery included the addition of secondary units as well a revamp of its crude distillation unit (CDU) and fluidised catalytic cracker unit (FCCU).

  • #4657

    Charles Randall
    Participant

    Here is another update on Essar Vadinar’s new coker & impact to its Fuel Oil export cargoes = stopping the 2 cargoes/month after last April shipment to Cargill.
     

    Most coker project news often leave out the elemination of fuel oil or asphalt sales (ie COP/WRN Woodriver new coker eleminates need 40MBD asphalt sales). Charts for US showed that demand fuel oil/asphalt bottomed out ~2008 and actually began to rise as cumulative coker additions dried up surplus volumes and market price along with demand started rising after over 20 years of decline. A similar process is being played out worldwide and especially in China & India as mentioned here.
     
    Having market price of alternate fuel oil & asphalt rise and spread between these bottom products and coker feedstock decrease is not a good thing for coker projects ……. however it is unlikely that the HFO or Asphalt price will exceed crude price (especially when sulfur levels now require higher level of diesel/product cutters for bottoms resids thereby decreasing value costwise) whereas coker products will (rule thumb value past for average value coker products is ~75% diesel price which is often at or above curde).
    Regards

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