Essar Oil UK Wednesday announced acquisition of BP’s stake in a pipeline and oil terminals in the UK to get rights over infrastructure used by its Stanlow refinery for evacuation of petroleum products.
Essar Oil will acquire 11 per cent stake of BP in the UK Oil Pipeline (UKOP), which transports products from Stanlow refinery, as well as its 45 per cent share in the Kingsbury terminal and a 100 per cent interest in the Northampton oil storage terminal, company CEO S Thangapandian said.
Essar had bought Stanlow refinery from Royal Dutch Shell in 2011. But at that time Shell had not sold the stake in the pipeline and terminals.
“We got an opportunity in BP deciding to exit from the projects,” he said.
Shell, US firm Valero and France’s Total are other partners in the UK Oil Pipeline which transports 7.5 million tonnes of mixed products each year to major oil terminals at Buncefield and Kingsbury with spurs to Northampton and Nottingham. The 650-km UKOP system supplies fuel to Heathrow and Gatwick airports and stretches from the Stanlow oil refinery in the north west of England to the Coryton refinery on the Thames in Essex.
The acquisition, he said, will fuel the growth of Essar Oil UK’s business in the UK.
“This latest expansion of its UK interests means Essar has now invested nearly USD 1 billion in building a profitable and sustainable UK business, since first acquiring the Stanlow Manufacturing Complex in July 2011,” he said.
He said the company has 67 petrol pumps across England and Wales and is on target to grow them to 400 over the next five years.
Already a significant player in the wholesale supply of Jet A-1 to major UK airports, the company has successfully entered the market for the direct supply of aviation fuel, signing agreements with a number of leading international airlines and continuing to grow this sector of its business.
“The company remains committed to further UK investment,” he said. “Essar continues to have great faith in the UK market, which represents an important part of the group’s strategic business growth ambitions. The acquisition of these BP assets further demonstrates the company’s ongoing commitment to investing in and growing their businesses within the United Kingdom.”
The acquisition was financed from internal resources.
“Essar will continue to play a key role in keeping Britain on the move. It currently supplies over 16 per cent of the UK’s road transport fuel demand and this agreement will enable us to improve our competitiveness. In a rapidly changing landscape, it is critically important we stay competitive through constant business development and innovation.
“The acquisition will allow Essar to maintain its presence in a very competitive UK Midlands region and grow that current footprint. In addition, we will continue to expand our retail offering with a number of the 12 new stations we recently branded through an agreement with MPK being supplied from the two terminals,” he said.
Essar will continue to look for opportunities to expand inorganically, provided the acquisitions are long term value accretive and complement Essar Oil UK’s growth plans.