Essar Energy PLC : HMU at Vadinar Refinery commissioned

Essar Energy commissions Hydrogen Manufacturing Unit at Vadinar Refinery

January 16, 2012:Essar Energy plc LSE, the India-focused integrated energy company, today announced that Essar Oil Ltd has successfully commissioned the Hydrogen Manufacturing Unit (HMU), the third new unit to be commissioned as part of the Phase I expansion at its Vadinar Refinery in India.

Essar Oil will commission six additional units by March 2012, thus completing a US$1.81 billion expansion project that will increase the Vadinar Refinery's capacity and enhance its complexity almost twofold. While capacity will increase to 18 MMTPA [million metric tonnes per annum; i.e. 375,000 bpd (barrels per day)] from 14 MMTPA currently (300,000 bpd), the refinery complexity will reach 11.8, up from 6.1 at present.

An optimisation project is also under execution at the refinery to further increase the capacity to 20 MMTPA (405,000 bpd) by September 2012. The capacity expansion, complexity enhancement and subsequent optimisation will give the Vadinar refinery the capability to process over 80% heavy and ultra-heavy crudes, which are lower cost than light crudes. In terms of product yield, the expanded Vadinar Refinery will have the flexibility to produce higher value products, including pet coke.

Lalit Gupta, managing director and chief executive officer of Essar Oil, said, "The operational readiness of the Amine Regeneration Unit (ARU) and the HMU is essential to support the smooth functioning of two key expansion units, the Diesel Hydrotreater (DHDT) and the Vacuum Gas Oil Hydrotreater (VGO-HT). The successive commissioning of the ARU and HMU within a week from each other has therefore made it possible for us to adhere to our project timelines."

The HMU helps produce and supply 99.9% pure hydrogen gas to the DHDT and VGO-HDT for the hydrotreating process. The HMU at Essar Oil's Vadinar Refinery is licensed by Haldor Topsoe and designed by UOP, one of the world's leading licensors of technology for the petroleum refining industry.

The HMU is designed to operate on six feedstock options - natural gas, saturated refinery fuel gas, saturated LPG, hydrotreated/stabilized naphtha and a blend of saturated LPG and hydrotreated naphtha - bringing down costs and strengthening refinery margins. The HMU has an installed capacity to generate 130 kNm3/hr of hydrogen gas, making it among the largest units in the world with HTER (Heat Exchanger Reformer) technology.

Notes to editors:

1. Essar Oil Limited is listed on the Bombay Stock Exchange and the National Stock Exchange of India and is a subsidiary of Essar Energy, which owns 87.1 per cent of the shares.

For further information on Essar Energy, please visit www.essarenergy.com

For further information on the Essar Group, please visit www.essar.com

Alternatively, please contact:

Essar Energy

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About Essar Energy

Essar Energy, through its subsidiaries, owns one of India's largest private power producers with 1,600MW of installed capacity and projects under construction to expand its capacity to 9,670MW.

Essar Energy, through its subsidiaries, owns one of India's fastest growing private sector oil and gas companies with a diverse portfolio of exploration and production assets. The Vadinar refinery, located in Gujarat, is India's second largest private sector oil refinery with throughput capacity currently being expanded from 14.7 million metric tonnes per annum to 18mmtpa by March 2012, and with further plans to expand to 20mmtpa by September 2012.

About Essar Group

The Essar Group (the "Group") is a multinational conglomerate and a leading player in the sectors of Steel, Oil, Gas, Power, Communications, Shipping, Ports, Logistics, Construction and Minerals. With operations in more than 25 countries across five continents, the Group employs over 70,000 people, with annual revenues of US$17 billion.

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