Essar Oil plans to export refined products to South Korea, Iran and Europe after its refinery starts operating in December 2005, the.company's managing director, A N Sinha said on Monday.

Essar's export drive, with planned expansions by state run refiners, will further increase India's refined product exports after growth of 40 per cent to 14 million tonne in 2003-04.

Mr Sinha said Essar planned to export naphtha to South Korea, gasoline to Iran and jet fuel to Europe, but did not give an estimate of the export volume.

"These products will get us good value in the international market," he told Reuters.

In March, the Royal Dutch/Shell Group said India's oil industry could rival Singapore in export capability in the' next few years. Singapore' exported 67 million tonne in 2003.

India, once Asia's largest diesel buyer, became an exporter after Reliance Industries set 'its refinery in the 1990s. The refinery, the world's third largest, now "processes 660,000 bpd.

Mr Sinha said Essar would build the primary processing facility for its refinery by December 2005 and initially process only 120,000 bpd of crude oil and condensate.

"We will start with only the, primary processing unit. So we will use a combination of condensate and crude. oil to '. get high-value products With-out secondary processing," he said.

Capacity will rise to 210,000 bpd by the middle of 2006, when secondary units such as the fluidised catalytic cracking unit will start operating. The refinery will produce about five million tonne of middle distillates, including. four million. tonnes of diesel and one million tonne of jet fuel and kerosene, he said. The company aims to sell most of its diesel in the. domestic market through Its own gas stations and to large consumers such as transport companies.

Essar has set up 31 gas stations and plans to raise the tally to 500 by December and , 800 by March.

It sold 61,000 tonne of diesel and 2,000 tonne of petrol in 2003-04. The company has been importing products and also buying them from Mangalore Refinery and Petrochemical Ltd. Essar will compete with Reliance Industries, which will set up of 2,000 retail outlets by March, Royal Dutch, which has been allowed to set up 2,000 gas stations, and state-run refiners which are already operating 20,000 petrol stations.

In the export market also it will compete with Reliance, which exported seven million tonnes of refined products in 2003-04 and expects a similar performance in 2004-05.

India's 18 refineries currently process 2.4 million bpd but by next year' several refineries will ,expand.

Indian Oil Corp will add 120,000 bpd at Panipat, "'Bharat Petroleum Corp 60,000 bpd at Mumbai and Hindustan Petroleum Corp Ltd. 10,000 bpd at Mumbai and Visakhapatnam. (Reuters)