Essar to set up Rs 15,000cr refinery in Jamnagar SEZ

AHMEDABAD: Another big-ticket investment is being lined up in petro-town Jamnagar. The Essar group has decided to set up a Rs 15,000-crore, 16-20 million tonne greenfield refinery in its upcoming SEZ near Jamnagar. This will be in addition to Essar’s new 10.5-mt Vadinar refinery, which will go onstream in October this year.

Jamnagar already boasts of the world’s largest grassroots refinery built by Reliance Industries (RIL). RIL is also setting up a Rs 25,000-crore, 27-mt refinery in its SEZ in the district. Essar has set a target of touching a cumulative refining capacity of 32 mt by 2009-10. The capacity expansion will be carried out in a phased manner.

While the refinery at Vadinar, in Jamnagar, is ready for commissioning, the new capacities will be a part of Essar’s 1,000-hectare SEZ in the same district. The conglomerate is planning to commission the Vadinar refinery in the first week of October as construction work on the Rs 16,000-crore refinery has been completed, a source said.

An Essar spokesperson told ET: "We are looking at various growth opportunities. But it is too premature to comment."

Essar has already got formal approval for developing the 1,000-hectare SEZ, for which it would pump in an estimated Rs 15,000 crore — most of which would be invested in constructing the new refinery.

Essar Oil, the group company executing the refinery project, has already begun the groundwork for construction of the new refinery as well as other downstream petrochemicals units that would be set up in the SEZ.

Executives of Essar Oil have begun parleys with the state ports regulatory authority, asking the latter to suggest suitable locations for putting up single buoy moorings (SBMs) in Gujarat waters. The company has sought approval for two SBMs.

The company is preparing a detailed project report for the new refinery as well as the two SBMs, the source added. Essar’s existing SBM at Vadinar, which is governed by the central government, would be able to cater only to the import needs of the existing 10.5-mt refinery.