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Essar Energy Defers Planned Shut Down of Indian Oil Refinery
Essar Energy said Monday that it was deferring a planned 35 day shut down of an Indian refinery to later this year in response to customer requests and fuel shortages on international markets.
The energy group had planned to shut down the Vadinar refinery in Gujarat for 35 days, which had been planned for May and June, but Essar said the shut down would now be deferred until September and October of this year.
The refinery shutdown has been deferred until after India's monsoon season, but Essar said this would not impact the schedule for commissioning of the Vadinar phase 1 refinery expansion.
Essar said the ramp up of the new refinery units will start during the third quarter and that the majority of the increase in production is expected from the middle of the fourth quarter of 2011.
The company said it had deferred the refinery shut down following requests from Bharat Petroleum Corporation Ltd., Hindustan Petroleum Corporation Ltd., and Indian Oil Corporation Ltd.
The public sector customers had urged Essar to continue production at the refinery due to tightness in Asian markets for petroleum products, particularly gasoil, following recent events in the Middle East and Japan.
The shutdown is being undertaken to integrate the existing refinery with the new units linked with the Vadinar phase 1 refinery expansion. The expansion will increase capacity to 375,000 barrels per stream day from around 300,000 currently and raise complexity to 11.8 from 6.1.
Essar said this will enable the refinery to process a larger share of ultra heavy and heavy crude oils and to produce high grade Euro V fuels which can be marketed to international customers.
The company will also conduct routine maintenance work during the refinery shut down.
Author: Justin Cole, analyst
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