India Essar ramps up refinery runs from May

NEW DELHI, May 21 (Reuters) - India's Essar Oil Ltd has raised the output of its 210,000 barrels per day Vadinar refinery in western India by 19 percent in May, an oil ministry official said on Wednesday.

Essar has offered state-run oil retailers, its biggest customers, all of the additional output of kerosene, diesel, petrol and liquefied petroleum gas, the official, who did not want to be named, told Reuters.

"Earlier this month, Essar informed us that it has raised output from 10.5 million tonnes a year (210,000 bpd) to about 12.5 million tonnes a year," the official said.

Essar was not immediately available for comment.

For a table on Essar's product slate, double click [ID:nDEL136134]

An official at one of Essar's customers said selling to state refiners is attractive as the private firm gets better prices than when it sells directly to the local market at government-mandated low prices.

The official, who also declined to be named, said state-firms also benefit from this arrangement as importing fuel is expensive.

Essar's refinery at Vadinar in Gujarat is the second private refinery in India's state-dominated oil sector. Reliance Industries Ltd. (RELI.BO: Quote, Profile, Research) runs a 660,000 bpd unit at Jamnagar, also in Gujarat.

Vadinar began operations in November 2006. Essar added a fluidised catalytic cracker (FCC) unit, a diesel hydro desulphurisation unit and some other secondary units to the plant in December.