OREANDA-NEWS. November 25, 2011. Essar Oil Limited (EOL), a subsidiary of the London-listed Essar Energy plc, today announced that it has renewed a major product sale and purchase agreement with Indian Oil Corporation Limited (IOC), India’s largest oil retailer.

The renewed three year agreement, running from 2012 to 2015 requires EOL to supply diesel, petrol, kerosene and ATF (aviation turbine fuel) to IOC from its Vadinar Refinery, totalling 2 million tonnes every year. It also entitles EOL to purchase products from IOC and gives the two companies the option of sharing each other’s distribution infrastructure.

EOL has similar product sale and purchase agreements with two other leading oil marketing companies from the public sector, namely Bharat Petroleum Corporation and Hindustan Petroleum Corporation.

The contract with IOC will be Essar Oil’s largest fuel supply contract. Essar is currently completing a phase 1 expansion project at its Vadinar refinery which will increase capacity from 14.7 million tonnes a year to 18 million tonnes (375,000 barrels per day) by March 2012. A concurrent optimisation project will increase capacity further to 20 million tonnes (405,000 bpd) by September 2012.

S Thangapandian, CEO – Marketing, EOL, said: “I am delighted that we are building on the long-term relationship that we share with IOC. Once the ongoing expansion project is completed, our Vadinar refinery will be able to serve our PSU customers better, especially in terms of meeting the growth in domestic demand for BSIV / Euro IV grade fuels.”

Mr Karandikar, GM-Supplies, IOC, said: “We are very happy with Essar Oil’s track record of timely product supply. Given the rapid growth in petro product demand in India and the additional capacity that will soon come on stream at Essar’s Vadinar refinery, we look forward to increasing the offtake volumes.”