Essar Oil (EOL)) announced today that it had dispatched the first cargo of 35,000 tonnes of Vacuum Gas Oil (VGO) from its refinery at Vadinar. This marks the beginning of supplies from the refinery for the international market. The consignment was loaded in a product tanker at Essar's port at Vadinar.

The refinery has a capacity of 10.5 million tones per annum representing 7% of India's total refining capacity. EOL will produce entire range of products - LPG, Aviation Turbine Fuel, Kerosene, Diesel, Petrol, and Fuel Oil. The Refinery has been built with state-of-the-art, contemporary technology and will have the capability to produce products to meet the quality standards of India as well as advanced international markets.

The refinery is configured in a manner that allows it the flexibility to process diverse varieties and qualities of crude such as light, heavy, sour or sweet crude.

The project cost of Rs.10,826 crore (USD 2.4 billion) is extremely competitive and lower than estimated costs for a green field refinery making it the largest private sector investment in recent years in the industry.

Essar Oil's refinery is supported by dedicated infrastructure that includes utilities, terminals, crude intake and product evacuation facilities. These include:

Vadinar Oil Terminal, which has an integrated facility to receive crude through a Single Point Mooring system and dispatch of finished petroleum products through its product jetty. The Terminal can handle 32 million tonnes per annum of crude intake with a capability of handling tankers up to 350,000 DWT and product dispatch facilities with an annual capacity of 14 million tonnes. The Terminal includes a port, a tank farm, associated pipeline network and storage & dispatch facilities. The Terminal has been built at a cost of Rs. 2,857 crore (USD 635 million).

Vadinar Power Company, which generates 120 MW of power at its co-generation plant and feeds both power and process steam for the refinery.

Marketing
The Company's products will have a ready market both internationally and in India. The ideal location of the refinery near the Vadinar port ensures easy access to all international markets including Europe and the USA.

The Company's strategy of commissioning its retail outlet in advance of the commissioning of the refinery ensures a ready outlet for its products in India. The Company will also be in a position to supply to bulk consumers. Essar Oil has already commissioned over 900 retail outlets and expects to have 1500 outlets fully operational by the end of March 2007.

Essar Constructions had a major role in the engineering, planning and construction of the entire refinery and had meticulously planned and executed the entire project in record time. Essar Constructions has over 1000 highly qualified technical and skilled manpower, besides the 16,000 people who worked at the refinery site during the project phase. The Essar Group believes that the synergies and advantages of the construction business have been a distinct advantage in building this petroleum complex.

About Essar Oil
Essar Oil is a fully integrated oil company of international size and scale, covering the entire value chain from exploration and production to refining and retailing of oil. Essar has set up over 900 retail outlets which are fully operational and plans to set up 2500 retail outlets by the end of 2007. Essar Oil employs highly qualified and experienced technical staff at its refinery.

About Essar
The Essar Group is one of India's largest corporate houses, with interests spanning the core and infrastructure sectors of industry - Steel, Oil & Gas, Power, Telecom & BPO, Shipping and Construction. It has an asset base in excess of US $ 6 billion (Rs. 27,000 crore) and employs 15,000 people.