Essar Energy primed to grow diesel revenues

Essar Energy, the FTSE 100 India focused energy company, says it has completed one of the new units at a major refinery upgrade.

The Vadinar refinery, located in Gujarat, is India's second largest private sector oil refinery with capacity currently being expanded from 14.7m metric tonnes per annum (mmtpa) to 18mmtpa by March 2012, with further plans to expand to 20mmtpa by September 2012.

The new unit, which has a capacity of four million tonnes per year, will upgrade diesel quality; the firm thinks this will be crucial in growing revenues as demand for cleaner diesel increases to accommodate European legislation. Indian cities are also beginning to demand Euro compliant diesel to reduce pollution.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

LK Gupta, Managing Director and Chief Executive Officer of Essar Oil, said, "We have now commissioned two key units that will help us produce diesel and petrol conforming to international standards."

"We are very close to delivering the scale that we had set out to achieve for the Vadinar Refinery. The increased complexity that we will have post expansion will give us greater flexibility to produce higher value fuels that have a growing market both in India and overseas."

Essar Energy shares had risen 0.55% by 11:45. Over the last year the stock has fallen 78%.

BS