Essar Energy has completed the 35-day shutdown of the Vadinar refinery, according to a company release. This was done to tie in new units for the first phase expansion and the revamp of three key units.

The expansion involves a capital cost of $1.85 billion (around Rs 9,000 crore) and will see Essar Energy complete almost $5 billion (Rs 24,500 crore) of projects across its power generation and refining businesses by March 2012.

The expansion will increase refinery capacity from 300,000 barrels per day (15 million tonnes) to 375,000 bbl/day (18.75 mt) and increase the complexity of the refinery from 6.1 to 11.8. This will help process a higher percentage of heavy/ultra-heavy crude oils. The expansion should be completed by the year-end and fully ramped up and stabilised by March 2012.

Mr Naresh Nayyar, Chief Executive Officer, said: “The completion of the phase I expansion will be a major value driver for the company, increasing gross refining margins, cash flow and profitability.”

Essar Energy is also well under way with an additional optimisation project at the refinery which will see capacity further enhanced to 405,000 bbl/day (a little over 20 mt) by September 2012 at a cost of $380 million (Rs 1,862 crore).

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