London-listed Essar Energy Plc on Monday said it expects to sign by month-end a deal to acquire Royal Dutch Shell's Stanlow refinery in northwest England for $350 million.
The company, announcing financial results
for 2010 full year, in a press statement, said it is "expecting to sign deal to acquire Stanlow, the UK's second biggest refinery, from Shell over the next 10 days, by March 31."
"Acquisition price will be $350 million plus inventory at cost price," Essar said.
Essar had on February 18 announced acquisition of the Stanlow refinery to make the Ruias-promoted firm the first Indian refiner with "truely global footprint".
Essar owns a refinery at Vadinar in Gujarat
which can process 2,80,000 barrels of crude oil per day.
It also owns a 90,000 bpd unit in Kenya and is expanding Vadinar to 400,000 bpd (20 million tonnes). Stanlow has a nameplate capacity of 2,96,000 bpd but currently operates at 2,20,000 bpd.
Together, it will now have a little less than one per cent of global oil refining capacity of 88 million bpd.
Essar will also pay for Stanlow's crude and oil product inventory, which will be about $780 million at current rates, the statement said.
Essar said the phase-I expansion of Vadinar refinery on the west coast will be completed this year at an estimated cost of $1.85 billion.
Following the expansion, the refining capacity will rise to 3,75,000 bpd and lift complexity from 6.1 to 11.8, allowing it to produce Euro V standard petrol and diesel of UK and European quality.
"We also have a further optimisation project underway at the Vadinar refinery costing $380 million to take capacity to 4,05,000 bpd by September 2012," the statement said.
In power, Essar said it has $8.02 billion investment underway. These include 10 power plants under construction totalling 8,070 megawatt of electricity generation capacity.
Besides, two other power plants are at a development stage totalling 1,800 megawatt at $1.56 billion. They will move to construction once the company has fuel and funding secured.
"By end of 2014, we will have 11,470 megawatt operational altogether against just 1600 megawatt now," Essar said.
"We are focused on delivering our growth projects including securing the necessary approvals to move forward with our coal mine developments," the statement said.
Essar Energy Chief Executive Naresh Nayyar said demand for energy in India is expected to continue to grow sharply.
"We remain focused on delivering our key projects, which in 2011 includes the first phase of our Vadinar refinery expansion and another 2,910 megawatt of power generation capacity," he added.