ESSAR Energy, the Inda-facing oil and gas group which owns the Stanlow oil refinery, reported higher margins in a trading update to December 31, today.
Expansion of its Vadinar oil refinery in India has led to more capacity and the current price gross refining margin at Stanlow rose 128% in the third quarter, to $5.59 per barrel compared with the same period last year as part of an ongoing development programme.
Production fell 9% to 18 million barrels at Stanlow in the third quarter due to a planned shutdown.
Essar is investing in the Ellesmere Port site, including installation of natural gas to replace fuel oil as its main source of fuel for the six boilers providing steam for the site which will bring environmental benefits, as well as better margins.
Since December 31 operations have performed in line with expectations, although a fire in a furnace at Stanlow on January 12 meant the site had to import product for a short time to meet customer demand.
No damage was sustained, production is back to normal and there should be no serious financial impact, the company said.
The group is also in negotiation with banks to refinance $2.27bn of debt at the Essar Oil division from rupees into dollars which will cut the company’s interest rates to around 6-7%, instead of the current 12-13% and is expected to achieve savings of at least $120m.