• PAGE ONE
• INDEX
• HOME

Essar's Vadinar crude terminal to begin operation from May

Santanu Sanyal

KOLKATA, Feb. 21

COME May and Essar's crude oil terminal at Vadinar (Gujarat), complete with SBM and storage facilities, will be ready for operation.

Disclosing this to Business Line on Wednesday, Mr Sasi N. Ruia of the Essar group, said negotiations were on with oil companies to secure their support for proper utilisation of the storage capacity.

Indian Oil Corporation, which transports more than 20 million tonnes (mt) of crude through its SBMs at Vadinar by pipeline to refineries at Koyali (Gujarat), Mathura (Uttar Pradesh) and Panipat (Punjab), has storage facilities at Virangam and Chaksu. But storage tanks at these places are of a much smaller capacity.

``We are gearing ourselves to provide a total package for crude transportation and storage,'' he said. Essar Shipping's fleet would take care of transporting crude from foreign ports for unloading at SBMs for the second round of transportation by pipelin es to the shore-based storage tanks.

The Vadinar project is estimated to cost Rs 1,400 crore, he said.

SBM and crude storage facility at Vadinar form part of the refinery complex. Mr Ruia conceded that the refinery project was behind schedule, saying ``we were delayed by more than 18 months.''

Essar Shipping's fleet consists of 37 vessels totalling 1.6 million dwt. The number of tankers, including seven Suezmax, is 19 with a total of 1.1 million dwt.

Mr Ruia prefers to call Essar Shipping the ``jewel in the Essar group's crown''. ``We never had it so good in the past 30 years,'' he said, adding that each Suezmax was now earning at the rate of $60,000 per day on an average compared to $16,000 a year a go.

Mr Ruia ruled out the possibility of Essar Shipping adding to its tanker tonnage. ``It is not time to go in for major investment decisions but to consolidate the gains achieved,'' he said.

Also, unlike many shipping companies which would sell ships when the going was good as a means to book profits, Essar Shipping had no plans to shed tonnage. ``Our ships are fairly new, the average age being 12 years,'' he said.

At Hazira, the work on the LNG and dry cargo terminal has just started. The project is being implemented in partnership with Shell, which is responsible for the LNG section of the terminal. The Indian partner is responsible for the dry cargo section. Eac h section will have a capacity of 10 mt. The capacity of the LNG section, however, will be stepped up gradually from five mt to 10 mt. ``We will have a captive dry cargo of about seven mt for the steel plants.''

The project would be ready for operation before 2003.

Meanwhile, a joint team from Essar Shipping and Malaysian International Shipping Company is currently in Korea to inspect the construction facilities for LNG carriers at the Hyundai shipyard. A 80,000-dwt LNG vessel is estimated to cost $200 million.

``Essar and MISC have jointly bid for the job of transporting LNG for the Dahej terminal of Petronet LNG Ltd. The question of placing orders for the vessel with the Korean yard will arise only if we are selected for the job,'' he added.