Essar Oil Refinery, Vadinar, Gujarat

The Essar Oil Ltd grass roots refinery in Gujarat, India (began in 1996) was completed and commissioned in 2006 (commissioned in third quarter). The refinery project was delayed a number of instances attributable to environmental considerations and financial problems, including preliminary price overruns and a shortfall in fairness contributions.

acetylene gas tankBased on firm studies, the refinery was 60% full in 1998 however had the misfortune to be struck by a cyclone that brought on appreciable injury. The refinery currently has the capacity to provide 370,000 barrels a day (thirteen.5 million tonnes per 12 months) and plans are underway to increase the capacity to 680,000 barrels a day (34mtpa) by the top of fiscal 2010. The refinery employs over 1,000 personnel (the construction process required between 3,000 and four,000).

The refinery is now the second largest in India after the Reliance Jamnagar refinery on an adjoining site which might produce over 27mtpa.

Essar Oil focuses on producing center distillates similar to excessive-grade kerosene oil and low sulphur excessive-velocity diesel, which kind over 60% of India’s domestic consumer demand.

Substituting imports will assist conserve India’s overseas change. The refinery will also produce LPG and lead-free gasoline of assorted octane ranges for the home markets and excessive-octane lead-free gasoline for export. Essar Oil has 1,300 retail stations with plans so as to add another a hundred and fifty outlets by the tip of 2010.

Refinery start-up

In November 2006 Essar Oil started operations in its Vadinar grass roots refinery and trial manufacturing with a capability of 7.5mtpa. In December 2006, the plant dispatched its first cargo of 35,000t vacuum fuel oil.

Essar shut down the plant for 3 weeks in July 2007 to upgrade the capability to 210,000bpd in addition to to add secondary models.

After the beginning of the commercial production of 10.5mtpa in Might 2008, in August 2008 Essar Oil reported a gross sale of Rs100bn for the first two months of its industrial operations. The profit for the quarter ending 30 June 2008 was Rs4.34bn.

Essar posted a gross turnover of INR418bn between Might 2008 and March 2009. Since then it has increased by 19.7% in the first quarter of 2010.

Commissioning course of

The models commissioned in the first phase have been the CDU, VDU, sulphur fuel unit, naphtha hydrotreater, catalytic cracker and visbreaker. The fluid catalytic cracker and a diesel hydro desulphuriser had been commissioned in November 2006.

The FCC and DHDS plants have been modified in order to be compliant with the cleaner Euro III and Euro IV fuels. The refinery configuration lends itself well to de-bottlenecking and its capability is believed might be enhanced to 14mtpa.

The refinery is totally integrated with its personal devoted 77MW power plant, which it plans to increase to 1,200MW plant.

The docking services include an SBM capable of dealing with vessels up to 350,000DWT with a capacity of 25mtpa, tankages with interconnecting pipelines of 20mtpa capacity, marine product dispatch capability of 12mtpa and rail-automotive and truck-loading facilities.

In early 2007 a hearth was reported at the refinery where 4 individuals had been killed and 18 injured. The fire broke out when employees had been finishing up welding work near a naphtha pipeline (which apparently was leaking). The refinery is now again in manufacturing producing in excess of 150,000 barrels a day.

Crude supply

Forward of the commissioning the company obtained a million barrels on the Vadinar port in Gujarat in August 2006. The crude was a Saharan blend appropriate for refining in the Essar Oil’s refinery. The company additionally acquired a second cargo from Vitol in West Asia. Each cargos had been of sweet crude.

The annual requirement of crude oil at the refinery is within the region of 10.5mtpa. The refinery is configured to allow flexibility to process numerous varieties and qualities of crude. The refinery is primarily designed to handle a crude mixture of Arabian Light and Heavy in a 70:30 ratio. Nonetheless, satisfactory flexibility has been offered to handle a wide range of crude mixes at refinery processing models from sweet-gentle crude to heavy excessive sulphur bitter and bituminous crude.

The refinery refines crude oil to supply diesel, gasoline, jet fuel, kerosene, gas oil and bitumen to go well with market requirements. Imported crude oil is discharged from a single buoy mooring situated off a coastal site at a distance of 8km. A submarine / onshore pipeline transfers crude to onshore storage tanks.

Contractors and development

The principal contractor and mission supervisor for the project since it was began is ABB Lummus World of the Netherlands (ABB put Rs9,300 into the undertaking). The company answerable for detailed engineering, procurement and construction (EPC) is TCE. Larsen and Toubro is one other engineering company concerned in the mission. Semb Co E&C has secured contracts value $350m for engineering, procurement, project management and development management for the mission.

The TCE remit for development consists of offsite facilities, storage and switch of crude, intermediates and products, mixing facilities, despatch services, fuel oil / gasoline system, effluent therapy and disposal facilities. Utilities embrace energy / steam technology facilities (two 38.5MW / three 150t per hour) with distribution network, compressed air (three 3,120Nm³ per hour) and nitrogen system (1,900Nm³ per hour), demineralising plant (775m³ per hour), desalination plant (two 390m³ per hour), salt cooling water facilities (sixty four,000m³ per hour) and tempered water facilities.

A refinery-large built-in Distributed Control System (DCS), secure guarding system, fire and fuel detection system and electrical management system is supplied with hardware positioned in satellite buildings and operator consoles provided within the crude oil tank management building and central control constructing. A sophisticated Tank Gauging System (TGS) has been supplied – one each for crude oil tank farm, product and intermediate tank farm and despatch tankages – comprising radar, servo and hydrostatic methods. Over seven hundred motor-operated valves with intelligent actuators are connected to DCS and emergency shutdown techniques. The despatch automation system is built-in with the TGS and DCS programs.

The refinery is being constructed with a view to the longer term since it could have adequate infrastructure for a low-price enlargement to a production capability of 27mmtpa. The refinery also has two desalination plants every with a capacity to provide 8,450m³ a day of much less-than-5ppm complete dissolved solids (TDS) from feed water of forty,000ppm TDS (sea water).

Port and delivery

The refinery has its own port and terminal amenities. Vadinar port is an all-weather, deep-draft, pure port with loading amenities for railcars and trucks.

Vessels as much as 350,000dwt may be dealt with by way of single point mooring (SPM) and there is also a marine product dispatch with a capability of 14mtpa.

Essar Transport has an agreement with Essar Oil to ship crude oil as required by the refinery. Essar Oil has set up a new company, Vadinar Oil Terminal, to administer all affairs of the brand new deep-water port on behalf of Essar Oil and Essar Transport.

Pipelines

The refinery is ideally located on the west coast of India at Vadinar, Gujarat, near both suppliers and prospects. This is the nearest level to the Middle East, which is a major source of crude provide. The site is linked to the Kandla-Bhatinda product pipeline by the Vadinar-Kandla pipeline, giving it quick access to the key markets of North India.

Essar constructions has bagged a number of pipeline projects over the past few years. The initiatives embody the INR2bn Baroda – Ahmedabad – Kalol gasoline pipeline mission, a Rs740m product pipeline project in Tamil Nadu, a Rs1.3bn gas pipeline challenge from GAIL and most not too long ago a Rs1.9bn, 504km pipeline mission.

Essar Oil also has a stake in the pipe-holding company Petronet India.

Financing

Funding for the mission, which quantities to an estimated INR98,740 ($2.26bn), has been a complicated arrangement.

Financial closure by Essar Oil has now been achieved for the challenge. In January 2005, Essar Tasks raised Rs3,750 by means of World Depository Receipts (GDR) and Essar Shipping raised $213m through the issuing of Foreign Forex Convertible Bonds (FCCB), to make a total of $299m (this was a condition of the remaining funds being launched).

The monetary institutions, together with ICICI bank, the Industrial Improvement Bank of India (IDBI) and the Industrial Finance Company of India (IFCI) bank, then released the remainder of the RS80,000 funding held in escrow for the undertaking.

In October 2008, Essat Oil ordered 4 steam turbine generators from Siemens Energy for the Vadinar Oil refinery in Gujarat. The $50m deal contains two steam turbines every rated at 105MW, two 93MW steam turbines and four generators.

Delivery of the steam turbine generators is scheduled by the third quarter of 2010.

Enlargement

Essar Oil Refinery will probably be expanded in two phases to achieve a capacity of 36mmtpa. The first phase contains capacity expansion to 18mmtpa. An funding of Rs78bn is being made in the first phase, which is scheduled to be commissioned by March 2011. By the top of the first half of 2009 33% of section I had been completed.

In part II, there are plans for establishing a new processing unit with a capability Petroleum of 18mmtpa. An funding of $4bn is being made in the phase II enlargement, which is expected anticipated to be completed by March 2013.

Essar’s construction arm, Essar Building (I), is endeavor the growth of the refinery. As of Janauary 2010, 28% of the construction was accomplished and overall refinery growth of forty one% was achieved.

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