Essar Oil completes Vadinar refinery expansion 4 months before schedule

Ruias-promoted Essar Oil on Tuesday announced completion of its Rs 10,000-crore expansion project, four months ahead of schedule, at the Vadinar refinery in Gujarat, taking the annual capacity to 20 million tonne.

Completion of the optimisation project marks the end of the capex cycle and we are now geared to enjoy significant upside in margins. The Vadinar refinery accounts for about 10 per cent of the country's refining capacity, Essar Oil, which is the country's second largest private refiner, said in a statement.

"We are very happy to announce the completion of our optimisation project much ahead of the schedule. With this commissioning, our capex cycle has now come to an end and we are fully geared to deliver the value of our investments to all our stakeholders," Essar Oil Managing Director and Chief Executive Lalit Gupta said in a statement.

The company has invested over Rs 10,000 crore to expand capacity to 20 mt, or 405,000 barrels per day, which will improve complexity to 11.8. This takes the total investment into the Vadinar facility to around Rs 24,000 crore, the company said, adding that the capital cost at Vadinar refinery is only half the global average for capacity creation.

Prior to expansion, the facility had 10.5 mt capacity and by March 29, 2012 this rose to 18 mt, involving an investment of Rs 9,100 crore. But the optimisation project, involving an additional Rs 1,700 crore capex, took the total capacity to 20 mt and investment to around Rs 24,000 crore.