Under the agreement, Essar will acquire an equity stake in the UKOP pipeline, a share of the contractual joint venture (with Shell) which runs the Kingsbury terminal and a 100% interest in the Northampton terminal. The BP assets are being acquired by two wholly owned subsidiaries of EOUK, namely Essar Midlands Limited and InfraNorth Limited.
This latest expansion of its UK interests means Essar has now invested nearly US $1 billion in building a profitable and sustainable UK business, since first acquiring the Stanlow Manufacturing Complex in July 2011.
Great faith in the UK market
Over recent years, Essar has broadened its downstream integration, with a highly successful and award-winning entry into the UK fuel retail market. With 67 Essar branded UK retail sites already operational across England and Wales, the company has confirmed plans to grow its network to 400 retail sites 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 direct supply of aviation fuel, signing agreements with a number of leading international airlines and continuing to grow this sector of its business.
“Essar continues to have great faith in the UK market, which represents an important part of the group’s strategic business growth ambitions,” commented Essar Oil UK chief executive officer, S.Thangapandian.
“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.
“Essar currently supplies over 16% 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.”
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.