Essar Oil completes 35 day shutdown of Vadinar Refinery

25 Oct 2011 Evaluate

Essar Oil, the fully integrated Oil & Gas Company has completed the 35 day shutdown of the Vadinar Refinery on schedule. The shutdown was taken for the tie-in of new units for the phase 1 expansion of the Vadinar Refinery and the revamp of three major units relating to the expansion - the CDU (Crude Distillation Unit), the FCCU (Fluidised Catalytic Cracking Unit) and the SRU (Sulphur Recovery Unit). Essar Oil has also taken advantage of the shutdown to carry out routine maintenance and inspection work.

In total, 2,424 maintenance and inspection jobs and over 1,400 tie-in jobs for the revamped units were completed. All of these jobs were completed without any accidents or injuries. This was a complex task for the company involving around 15,000 employees and contractors, which was completed on schedule and to the highest safety standards.

The Vadinar phase I expansion will increase refinery capacity from 300,000 barrels per day (bbl/day) to 375,000 bbl/day and increase the complexity of the refinery from 6.1 to 11.8, allowing for the processing of a much higher percentage of heavy and ultra heavy crude oils and the production of a higher value product mix. The expansion should be mechanically complete by year end and fully ramped up and stabilized by the end of March 2012. The Vadinar phase I expansion has a capital cost of $1.85 billion and is part of a major expansion programme of the company.

Essar Oil is also well underway with an additional optimisation project at the Vadinar refinery which will see the capacity of the refinery further enhanced to 405,000 bbl / day by September 2012 at a capital cost of $380 million. This project involves converting the redundant Vizbreaker Unit into a second Crude Distillation Unit and optimizing the capacity of all supporting infrastructure.

The completion of the phase I expansion will be a major value driver for the company, increasing gross refining margins, cash flow and profitability. In addition, the opportunity to carry out routine maintenance and inspection at the same time means that the company can also benefit from an extended period of operation without any further shutdowns.

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