Essar Energy [LSE: ESSR] has today announced that it will defer its 35 day planned shut down at the Vadinar refinery in Gujarat, originally planned for May and June 2011.
This decision has been made following requests from Essar Energy’s major public sector customers, Bharat Petroleum Corporation Ltd, Hindustan Petroleum Corporation Ltd and Indian Oil Corporation Ltd to continue production due to tightness in Asian markets for petroleum products, particularly gasoil, following recent events in the Middle East and Japan.
The planned shutdown will be deferred until September and October 2011, after the monsoon season, but will not impact the schedule for the commissioning of the Vadinar phase I refinery expansion. Ramp up of the new units will commence in Q3 2011 with the majority of the increased production expected from mid Q4 2011.
The planned 35 day shutdown is being undertaken to integrate and synchronize the existing refinery with the new units associated with the Vadinar phase I refinery expansion. This expansion will increase capacity to 375,000 barrels per stream day from around 300,000 currently and more importantly, increase complexity from 6.1 to 11.8. This will allow the refinery to process a greater proportion of ultra heavy and heavy crude oils, and to produce high grade Euro V fuels which can be sold into international markets. During the shutdown, Essar Energy will also carry out its routine maintenance schedule at the refinery.
Mr Naresh Nayyar, Chief Executive of Essar Energy said: “Events in the Middle East and Japan have impacted the availability of petroleum products in the Asia region, particularly middle distillates such as gasoil. We are working with our customers to ensure the continued availability of petroleum products during this period of tightness. This will not impact the timing of our Phase I refinery expansion”.
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About Essar Energy
Essar Energy (LSE:ESSR) is a world class, low-cost, integrated energy company with an established track record.
Essar Energy, through its subsidiaries, owns one of India's largest private power producers with 1,600MW of installed capacity and projects under planning and construction to expand its capacity to 11,470 MW by the end of 2014.
Essar Energy, through its subsidiaries, owns one of India's fastest growing private sector oil and gas companies with a diverse portfolio of exploration and production assets. The Vadinar refinery, located in Gujarat, is India's second largest private sector oil refinery with throughput capacity of 14mmtpa and plans to expand to 20mmtpa by September 2012.
About Essar Group
The Essar Group (the "Group") is a multinational conglomerate and a leading player in the sectors of Steel, Oil & Gas, Power, Communications, Shipping Ports & Logistics, Construction and Minerals. With operations in more than 20 countries across five continents, the Group employs 70,000 people, with revenues of USD 15 billion in 2009.
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This announcement contains certain forward-looking statements, including statements regarding Group's plans, objectives and performance. Such statements relate to events and depend on circumstances that may occur in the future and are subject to risks, uncertainties and assumptions. Although the Group believes that the expectations reflected in such forward looking statements are reasonable, there are a number of factors which could cause actual results and developments to differ materially from those expressed or implied by such forward looking statements, including, without limitation, the enactment of legislation or regulation that may impose costs or restrict activities; the re-negotiation of contracts or licences; fluctuations in demand and pricing in the Oil and Gas, Power and Energy industries; fluctuations in exchange controls; changes in government policy and taxations; industrial disputes; war and terrorism. Further information on the significant risks and uncertainties associated with the Group's business is set out in the Prospectus published on 4 May 2010. These forward-looking statements speak only as at the date of this document. The Group undertakes no obligation to update any forward looking statements whether as a result of new information, future events or otherwise, except to the extent legally required.
These statements (and all other forward-looking statements contained in this document) are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the Group's control, are difficult to predict and could cause actual results to differ materially from those expressed or implied or forecast in the forward-looking statements.
This announcement does not constitute, or form part of, an offer or any solicitation of an offer for securities in any jurisdiction, or an invitation or inducement to invest in the Group or any other entity and should not be relied upon in any way in connection with any investment decision.
