The Essar Oil UK Group of companies has agreed to acquire certain midstream assets in the UK from BP for an undisclosed price in a move to further consolidate its logistics infrastructure network in the country.
As per the deal, Essar will buy an equity stake in the UKOP pipeline, a stake in the contractual joint venture with Shell which operates the Kingsbury Terminal along with a 100% stake in the Northampton Terminal.
The assets are being purchased by the company’s two wholly-owned subsidiaries – Essar Midlands and InfraNorth.
The UKOP is an oil products pipeline, which has been in service since 1969. The pipeline supplies 7.5 million tons of mixed products per year to major oil terminals at Buncefield and Kingsbury among other places.
The Kingsbury Oil Terminal, which is located in Warwickshire, is an oil storage depot. It has been serving the Midlands region since the late 1960s.
Essar said that the latest transaction takes its investment in the UK to almost $1bn. The company’s first investment in the UK was in the Stanlow Manufacturing Complex in 2011.
The Stanlow Refinery, which is built near Liverpool, is said to produce 16% of UK road transport fuels, which includes 3 billion liters of petrol, 4.4 billion liters of diesel and 2.1 billion liters of jet fuel per year.
The company said that in the recent years, it has expanded its downstream integration in the UK. Currently, it has 67 Essar-branded UK retail sites that have been operating in England and Wales with plans to grow it further to 400 retail sites in the coming five years.
Essar Oil UK CEO S.Thangapandian 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.
“Essar will continue to play a key role in keeping Britain on the move. It currently supplies over 16% of the UK’s road transport fuel demand and this agreement will enable us to improve our competitiveness.”