Essar to kick off Gujarat refinery phase-I in July

Move will help company ramp up its retail fuel business.

Essar Oil is set to commission the first phase of its Rs 10,000 crore 10.5 million tonne Jamnagar refinery by July. In the first phase, the 6 million tonne mother unit would be commissioned.

A Essar official said, "The first phase will produce motor spirit or petrol and diesel from its mother unit. This will help the company to rejuvenate its retail network of more than 500 pumps across the country." Essar is scheduled to commission the entire project by April 2007, added the Official.

Till the end of second quarter of current financial year, Essar was supplying 2,40,000 KL of petrol and around 1,80,000 KL a month to its dealers.

The supply was curtailed owing to jump in refinery gate prices which was causing losses to the company in its retail business. This compelled the company to put its retail plans on the backburner till the time refinery was commissioned.

Now with the commissioning of the mother unit, Essar will have its retail network back in business by end of July 2006. Essar plans to commission 1,500 to 1,800 outlets by the end of 2006 and 5,000 retail outlets by 2008.

As the refinery project, in subsequent phases, goes on stream it will start producing other downstream products.

The power plant or the utility plant with 77 mw capacity would be the first unit to be commissioned in the complex in February.

Essar has simultaneously started work on the crude pipeline and jetty, which will soon receive its first crude consignment for the refinery. The tank farm for crude and finished products is also on the verge of completion and is undergoing hydro-testing.

The crude oil is expected to be a mix bag of various types, said the official, adding that the refinery was designed to process all types of crude.

Essar resumed work on the refinery in February 2005 after work on the project was stopped owing to various reasons in January 2002.