Gujarat has come one step closer to becoming a global refining hub, with the Ruias-promoted Essar Oil importing the first cargo of crude to fire up its 10.5 million tonne refinery in the state by the end of October or early November.

The company started unloading the cargo of one million barrels at Vadinar on Friday evening. The cargo consists of Saharan blend sweet crude imported from Algeria.

The company is getting another cargo of one-million barrels of Dubai light next week from Vitol. The cargoes now set the stage for trial runs to begin.

Company sources said the refinery will initially produce seven million tonnes of petrol and diesel only. The plant will reach its full capacity by March next year.

The company will focus on exporting its products as domestic sale is a loss-making proposition for private retailers due to the artificially low price set by the government.

While the government makes up for the losses of state-owned petromarketing firms through bonds, private companies have no such relief.

Essar had resumed work on the refinery in March last year. It had originally scheduled to begin commercial production in April 2007 but is completing work ahead of schedule to make the most of flaring global crude prices that yield high refining margins.

The refinery is designed to process various grades of crude which will allow flexibility in operations and crude procurement.

The refinery will bring on stream the various units to extract byproducts in stages. The refinery will produce motor fuels conforming to Euro-III and Euro-IV category.