Made in India. Built by Essar.
Vadinar Refinery: India’s second largest private sector refinery
The 20-million tonne Vadinar Refinery, which is now operated by Nayara Energy, embodies the resilience of Essar and its people.
Work on the refinery had begun way back in 1994, but commercial production could only commence in 2008. In 1998, a devastating cyclone hit the western coast of India damaging several structures at the refinery site. Also, financial sanctions imposed on India subsequent to the Pokhran nuclear test in May 1998 ensured that Indian companies were barred from seeking foreign funding. Work stopped at the refinery site and Essar Oil, which was keen on becoming a significant player in the oil refining industry, had to bide its time for several years.
In early 2005, Essar Oil restructured its balance sheet and work resumed with renewed vigour on completing the refinery project. During the period of stoppage, Essar had wisely planned for technology upgrades. This is why within 18 months after work resumed, Essar was able to start commissioning the refinery in phases. Trial production had started by November 2006, and by 2008, the Vadinar Refinery had commenced commercial production. Within just four years of being commissioned, the initial refining capacity and refinery complexity were almost doubled—from 10.5 million tonnes to 20 million tonnes and from 6.1 to 11.8, respectively—through an expansion and optimisation project.
Today, the Vadinar Refinery is the country’s second largest single-location refinery. It is also among the five most complex refineries in the world, which means that it can process dirtier and cheaper crudes that have a positive impact on refining margins. It boasts of the world’s tallest crude distillation unit (CDU), a piece of machinery that is the backbone of any refinery. Built on over 3,000 acres of land, the refinery has a third of its area reserved for a green zone. The green zone is dotted with more than 3 lakh trees, including 1.1 lakh mango trees. It has its own power plant and the Vadinar Oil Terminal for receiving crude and dispatching finished products across India and many overseas locations around the world.
In August 2017, the Vadinar Refinery was transferred to Rosneft and the Trafigura-UCP consortium (a JV that has recently been rechristened as Nayara Energy) as part of the historic Essar Oil deal, which valued the refinery, its captive port and power plant, as well as a 3,500-strong India-wide retail network at $12.9 bn, making it among the top two FDIs in the Indian energy sector.
*Essar Oil Limited and its subsidiaries are financially and legally independent from Essar. Essar Oil Limited is currently known as Nayara Energy Limited. Click here for more details on the Essar Oil Deal