Essar Energy set to sign deal on Shell refinery purchase

Essar Energy set to sign deal on Shell refinery purchase

Mumbai: London-listed Essar Energy Plc will sign an agreement with Royal Dutch Shell in the next 10 days to acquire its refinery in Stanlow in northwest England, the company’s management said on Monday.

Essar expects to take ownership of the Stanlow unit by the second half of the current calendar year and subsequently integrate it with the company’s existing refinery business.

It will also invest further in removing some “bottlenecks," Prashant Ruia, Essar’s vice chairman, said in a conference call on Monday. The Stanlow refinery has a nameplate capacity of 296,000 barrels per day, but is only operating at 220,000 barrels per day.

Essar is paying Shell $350 million for the Stanlow refinery.

Naresh Nayyar, Essar Energy’s chief executive, said the company will look to export diesel from its refinery in Vadinar in Gujarat, once its expansion is completed. Nayyar said that the first phase of the expansion would be complete this year, following which it would be able to produce petrol and diesel compliant with European emission standards.

Essar expects to leverage Shell’s distribution network in Europe to market its exported fuel.