Essar Oil and BPCL renew contract

Essar Oil Ltd. (EOL) and State-owned Bharat Petroleum Corporation Ltd. (BPCL) recently renewed a major product sale and purchase agreement. The four-year agreement runs up to 2016, and involves the supply of diesel fuel, petrol, kerosene and aviation turbine fuel from EOL’s refinery at Vadinar in Gujarat, western India, to BPCL. The agreement also allows EOL to purchase products from BPCL with the added option for both companies to share each other’s distribution network. The signing of the renewal of the agreement was announced by EOL’s CEO–Marketing, S. Thangapandian. Over the years, Essar Oil has emerged as BPCL’s biggest supplier of fuels. EOL has also signed similar product sale and purchase agreements with Indian Oil Corporation Ltd. (IOC) and Hindustan Petroleum Corporation Ltd (HPCL), two of the country’s leading oil marketing firms from the public sector. EOL’s Vadinar Refinery is considered one of the most complex refineries in the world and has the capability to manufacture products with higher value and high quality, such as gasoline and diesel fuel that conform to Euro 4 and 5 standards. These products are gaining popularity in India and other countries. EOL recently completed the first phase of the expansion project at Vadinar with an investment of Rs 8,300 crore (US$1.47 billion), which has increased the plant’s capacity from 14.7 million tons per annum (mtpa) to 18 mtpa. By September, the company hopes to increase the capacity to 20 mpta. (April 28, 2012)