Essar to acquire refinery in Britain for $350 million

Essar to acquire refinery in Britain for $350 million

The company, announcing financial results for 2010 full year, in a press statement, said it is "expecting to sign deal to acquire Stanlow, the UK's second biggest refinery, from Shell over the next 10 days, by March 31."

"Acquisition price will be USD 350 million plus inventory at cost price," Essar said.
Essar had on February 18 announced acquisition of the Stanlow refinery to make the Ruias-promoted firm the first Indian refiner with "truely global footprint".

Essar owns a refinery at Vadinar in Gujarat which can process 2,80,000 barrels of crude oil per day.

It also owns a 90,000 bpd unit in Kenya and is expanding Vadinar to 400,000 bpd (20 million tons). Stanlow has a nameplate capacity of 2,96,000 bpd but currently operates at 2,20,000 bpd.

Together, it will now have a little less than one per cent of global oil refining capacity of 88 million bpd.

Essar will also pay for Stanlow's crude and oil product inventory, which will be about USD 780 million at current rates, the statement said.

Essar said the phase-I expansion of Vadinar refinery on the west coast will be completed this year at an estimated cost of USD 1.85 billion.

Following the expansion, the refining capacity will rise to 3,75,000 bpd and lift complexity from 6.1 to 11.8, allowing it to produce Euro V standard petrol and diesel of UK and European quality.

"We also have a further optimisation project underway at the Vadinar refinery costing USD 380 million to take capacity to 4,05,000 bpd by September 2012," the statement said.

In power, Essar said it has USD 8.02 billion investment underway. These include 10 power plants under construction totalling 8,070 megawatt of electricity generation capacity.

Besides, two other power plants are at a development stage totalling 1,800 MW at USD 1.56 billion. They will move to construction once the company has fuel and funding secured.

"By end of 2014, we will have 11,470 MW operational altogether against just 1600 MW now," Essar said.

"We are focused on delivering our growth projects including securing the necessary approvals to move forward with our coal mine developments," the statement said.
Essar Energy Chief Executive Naresh Nayyar said demand for energy in India is expected to continue to grow sharply.

"We remain focused on delivering our key projects, which in 2011 includes the first phase of our Vadinar refinery expansion and another 2,910 MW of power generation capacity," he added.

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