Mumbai: Mumbai-based Essar Oil Ltd will likely achieve financial closure for its project to expand its refinery capacity to 16 million metric tonne per annum or mmtpa by next month, said P. Sampath, director-finance, in a meeting with analysts on Tuesday.
The capacity expansion will be completed by December 2010. The original plan was to expand refining capacity to 34 mmtpa in one go. ”But considering the impact of global macro economic development, the completion of this project will be executed in two phases,” Sampath said. “Phase 2 of expansion project of adding 18 mmtpa will be commissioned by December 2011.”
The total cost of the project is Rs7,810 crore; of this Rs3,210 crore will be in equity and Rs4,600 crore in debt.” Debt of $100 million (about Rs500 crore) has been disbursed and another letter of credit worth Rs1,600 crore has already (been) opened. The promoters have infused $300 million towards equity,” Sampath said. According to an analyst tracking Essar Oil stocks, who is not authorised to speak to media, it makes sense to review the refinery expansion plan and the company can ensure the expansion in capacity matches with the global demand revival.