Essar's U.K. Oil Refinery Turning Toward Jet Fuel, Chemicals

  • More aviation fuel produced once modernization work ends
  • Essar’s first EV charging station to open near Stanlow

A global shift toward electrical vehicles is leading India’s Essar Group to reconfigure its U.K. oil refinery and retail network to remain relevant in a rapidly evolving energy market.

In July, six years after Essar acquired the Stanlow refinery near Liverpool from Royal Dutch Shell Plc, the British government announced a plan to ban sales of cars fueled by gasoline and diesel by 2040. To hedge its investment, Essar has started an internal study to devise the best way to move beyond ground-transportation fuels and shift its focus to aviation fuel and petrochemical products.

The refiner will also put its first electric-vehicle charging station at a retail outlet it is building near Stanlow next year, and will decide whether to plant more such charging points across its U.K. retail network.

“We are currently undertaking a reconfiguration study which is for strategic importance, to focus on the ever-changing landscape we operate in,” S. Thangapandian, chief executive officer of Essar’s U.K. operations, said on a conference call from Stanlow on Wednesday. “This will help in determining how we see the world in the next 10-15 years.”

With major countries including France, the U.K., China and India openly discussing the phasing-out of fossil-fuel-powered cars in coming decades, international energy companies are adapting to safeguard their future. Shell in November agreed to buy NewMotion, which operates 30,000 charging stations across Europe. BP Plc is studying how it might attract cars run by computers to its fuel stations.

Essar is already modernizing Stanlow to increase its jet fuel supply to U.K. airlines, and depending on the outcome of the internal study next year, may increase its petrochemical production to 20 percent of refinery output, from 6 percent currently, Thangapandian said.

Thangapandian said the plan is “in simple words, to move from transportation fuel which is the main driver today, to other products with a longer life span in the market, like jet fuel and petrochemicals.”

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