06-09-2017

Essar Oil to invest $250M in capex and maintenance at Stanlow refinery

Essar Oil (UK) Limited, which owns and operates the Stanlow Refinery, today confirmed significant capex investment and reported strong Q4 figures and financial results for the financial year ending March 31st 2017.

Including FY18, Essar will have invested over $800 million since acquiring Stanlow in July 2011, helping to turnaround the business and deliver significant improvement in the following areas:
1. Safety performance remains a critical business objective, with continuous investment in Health, Safety and Environment (HSE) to further improve standards.  Stanlow achieved the Order of Distinction for 21 consecutive Gold awards in the Royal Society for the Prevention of Accidents (RoSPA) Health and Safety Awards 2017. Connection to the national gas grid enabled the refinery to meet tighter environmental legislation regarding emissions.

2. A continued focus on margin booster initiatives and cost efficiencies has seen a significant improvement in the operating and financial performance over this period.  In FY15 Essar reconfigured and optimised Stanlow to a single train operation which increased the yield of high margin products such as gasoline and middle distillates, while the crude slate has been materially diversified with the introduction of 37 new grades.  

3. These major initiatives have resulted in a latest quarter delta margin improvement of +$ 4/bbl, raising Stanlow’s margin from under $ 1/bbl to almost $5/bbl above the KBC Northwest Europe Cracking Margins benchmark.  

4. Investment in the Tiger Cub project and additional works planned for the major block turnaround in 2018 will drive further margin upsides by way of increased throughput and unit margins.  As such, Essar will then have delivered a hydrocarbon margin improvement of +$5/bbl since acquisition in 2011.

During FY17, a number of new monthly records were established for the highest CD4 Distiller crude throughput under Essar ownership, the highest ever amount of residue upgraded via Europe’s largest Catalytic Cracker and the highest ever production levels of diesel, alkylate and propylene.

Already a major player in the wholesale supply of Jet A-1 to UK airports, Essar secured contracts for the direct supply of aviation fuel to major airlines such as Emirates, Etihad, Jet2.com and Oman Air.

An award winning entry to the UK retail market has seen the Essar network grow to 36 stations, with planning permission secured for the first company owned site to be opened later this year.

Essar Oil UK has established working capital facilities and no long term debt.