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Ellesmere Port Stanlow oil refinery will not be sold off

Chief executive reveals plans to spend millions on Cheshire plant

The Essar refinery at Stanlow(Image: Essar)

The owners of Ellesmere Port’s oil refinery at Stanlow have sold their domestic oil business in India to a consortium led by Russian oil giant Rosneft for almost $13bn.

But The Essar Group, which runs the former Shell plant through Essar Oil UK Ltd, a totally separate company to the Indian business, says there are no plans to sell the refinery.

Essar Oil UK Ltd chief executive S Thangapandian has revealed fresh investments of $250m will pour in to upgrade and expand Stanlow after investing over $800m there since acquiring it from Royal Dutch Shell in 2011. Rosneft, majority owned by the Government of Russia, is based near the Kremlin across the River Moskva.

The deal, in which Rosneft will have a 49% stake in the former Essar Oil business, was signed in the presence of Russian president Vladimir Putin and Indian Prime Minister Narendra Modi at an international summit meeting last year.

The Essar Group itself is owned by the Ruia brothers of Mumbai, described as billionaires.

Stanlow Oil Refinery(Image: Robert Parry-Jones)

For Essar Oil UK, their firm that owns and operates the Stanlow refinery, the indications are very firmly business as usual with Mr Thangapandian insisting the $250m of fresh investment shows the group’s commitment to stay in oil and gas.

“We are sure they will stay invested in oil and gas and Stanlow refinery,” according to a source.

Sitting on a 770-hectare industrialised area of Ellesmere Port, Stanlow supplies 16% of all road transport fuels in the UK, he says. The new investment will boost the crude oil throughput at Stanlow to 9.7m tonnes by March 2018, up from a current 9.09m tonnes. There is also a long term company target of 400 petrol pumps in the UK in five years, up from the current 39 with permission already obtained for 14 of these.

“The investment in revamping a number of units at the refinery will deliver enhanced yields of high value products, reduce crude oil processing costs and drive revenue growth,” Mr Thangapandian believes. The project will also lead to a marginal increase in capacity.

Essar has also entered into the direct aviation fuel supply market selling fuel produced at Stanlow to major airlines such as Emirates, Etihad, Jet2.com and Oman Air with the company looking to increase sales.

Essar Oil UK non-executive chairman Prashant Ruia added: “The major investment we have confirmed in Stanlow will materially increase throughput and further grow revenues building on the tremendous progress we have made in turning around the business over the past six years.”

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