UPDATE 1-Essar Shipping plans $2.5 bln investment

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MUMBAI, June 20 (Reuters) - Essar Shipping Ports & Logistics Ltd (ESRS.BO: Quote, Profile, Research) said on Friday it plans to invest more than $2.5 billion over the next three years to expand its port and shipping capacity and add rigs.

"The money has been raised through debt and internal accruals," Managing Director Sanjay Mehta said at an analysts meet.

The investment is expected to add $900 million in annual contracted revenue, he said.

Of the total capex, the company would spend $440 million to add two jack-up rigs and take its total rig fleet to 15.

The orders have been placed with ABG Shipyard Ltd (ABGS.BO: Quote, Profile, Research) and the first will be delivered by October 2010 and the second by January 2011, Chief Financial Officer V Ashok said.

The firm would be spending about $1 billion to add 14 ships to its existing fleet of 24 vessels, by 2011, Ashok said.

The company also plans to invest about $1 billion in its unit Essar Ports & Terminals, which manages its ports and terminal businesses.

Shares of Essar Shipping closed down 5.09 percent at 118.45 rupees in a weak Mumbai market. (Reporting by Aniruddha Basu; editing by Sunil Nair)