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Essar to become India's 3rd largest refining company

24 Dec 2009 Evaluate

Ruias-owned Essar Oil is set to emerge as India's third largest oil refining company and one of the most complex refineries worldwide after it completes expansion of its Vadinar unit. Essar is raising the Vadinar refinery capacity to 16 million tonnes from 10.5 million tonnes by December 2010 and further to 34 million tonnes in Phase-II expansion to be completed by December 2011, making it the country's third largest refining company after Reliance Industries and Indian Oil Corp.

 

The expansions would help the firm earn about USD 3 more on processing of every barrel of crude oil. While refinery expansions will result in USD 3 per barrel premium over Singapore complex GRM (gross refining margin or earnings on processing of per barrel of crude), strategic focus on product evacuation will help maintain high capacity utilization.

 

After the expansion, Vadinar refinery in Gujarat would be able to process most of the dirty and difficult crude that are sold at substantial discounts to premium crude like Bonny Light or Brent. Its complexity index (a measure of the refinery's capability of process difficult crude) will rise from existing 6.1 to 11.8 in 2011-12 and to 12.8 in 2012-13.

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Peers
Company Name CMP
Reliance Industries 1365.10
Indian Oil Corp. 145.85
BPCL 312.05
HPCL 370.95
MRPL 183.20
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