Pre Feasibility Report – Proposed LPG Storage Facilities of PTIL, Bharana Page 2 EXECUTIVE SUMMARY

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Pre Feasibility Report – Proposed LPG Storage Facilities of PTIL, Bharana Page 2 EXECUTIVE SUMMARY PETRO TANKAGES INDIA Limited Pre-Feasibility Report Proposed LPG Storage of Petro Tankages India Ltd. (PTIL) at Bharana (Gujarat) AUGUST 2014 Contents 1. EXECUTIVE SUMMARY ....................................................................................... 3 1.1 Background ........................................................................................................... 3 1.2 Proposed LPG Storage.......................................................................................... 4 1.3 Site Description ..................................................................................................... 4 1.4 Site Condition ....................................................................................................... 5 1.5 Rehabilitation and Resettlement issues................................................................. 5 1.6 Pollution Control Mesaures.................................................................................... 5 1.7 Project Schedule and Cost Estimates.................................................................... 5 2. INTRODUCTION OF THE PROJECT................................................................... 6 3. SITE INFORMATION............................................................................................. 8 3.1 Site Location.......................................................................................................... 8 3.2 Site Condition ........................................................................................................ 9 3.2.1 Metrological .................................................................................................... 9 3.2.2 Transport Linkage .........................................................................................10 3.2.3 Site Analysis...................................................................................................11 4. EXISTING FACILITIES OF ESSAR......................................................................14 5. PROPOSED LPG STORAGE PROJECT DESCRIPTION....................................16 6. ENVIRONMENT CONTROL MEASURES............................................................21 7. PROJECT SCHEDULE AND COST.....................................................................22 7.1 Project Schedule ..................................................................................................22 7.2 Project cost...........................................................................................................22 7.3 Project Summary ..................................................................................................22 Pre Feasibility Report – Proposed LPG Storage Facilities of PTIL, Bharana Page 2 EXECUTIVE SUMMARY 1.1 Background Essar Group is a multinational conglomerate and a leading player in the sectors of Steel, Energy, Power, Communications, Shipping, Ports & Logistics, Construction and Minerals. Today, the Group continues to expand its global footprint, focusing on markets in Asia, Africa, Europe, the Americas and Australia. Essar invests significantly in the latest technology to drive forward and backward integration in its businesses, and on leveraging synergies between these businesses. Essar Ports Ltd (EPL) is one of the largest private sector port companies in India offering a range of port and terminal services for liquid, dry bulk, break bulk and general cargo. EPL holds various port assets of Essar housed in separate SPVs, EPL currently has operational capacity of 104 MMTPA across its terminals in Vadinar and Hazira in Gujarat and Paradip in Orissa. The company is in the process of increasing its aggregate port capacity to about 200 MMTPA with an expansion project at Hazira, a new bulk terminal at Salaya in Gujarat, a new coal terminal at Paradip, Odisha and iron ore terminals at Vizag, Andhra Pradesh. Essar Oil Limited (EOL) started commercial operation of 10.5 MMTPA refineries in April 2008 at Vadinar on the West Coast of India in the state of Gujarat. In subsequent years, the Refinery was expanded to 20 MMTPA and upgraded considerably by addition of equipment allowing operation with heavy, sour crudes. This expansion and upgrading was accomplished through several projects, reaching completion in early 2012. The rated capacity of Train 1 on above basis is 20 MMTPA. The Nelson Complexity factor for Train 1 is calculated to be 11.8. Vadinar Oil Terminal Limited (VOTL) and Vadinar Ports and Terminal Limited (VPTL), are providing the Port and terminal facilities to the 20 MMTPA petroleum refinery of Essar Oil Limited. VOTL and VPTL are Essar group companies and associate of Essar Oil Limited (EOL). Essar’s Marine and offsite facility created to support EOL Refinery consists of one SPM, one product jetty having two Berths, a rail gantry, six road gantries, cross country pipeline and around 3 million KL storage tanks for crude oil and petroleum products. Pre Feasibility Report – Proposed LPG Storage Facilities of PTIL, Bharana Page 3 India is deficit in LPG, as against the demand of approx. 16 MMTPA domestic production is approx. 10 MMTPA. The excess demand is met by import of LPG through various terminals. VPTL through a new SPV ‘Petro Tankage India Limited’ plans to develop LPG import terminal. Facilities of VOTL and VPTL will be utilized for import of LPG and Petro Tankage India Limited (PTIL) will develop the facilities for storage and transportation of LPG. 1.2 Proposed LPG Storage It is proposed to store LPG in refrigerated tanks. The proposed location for storage is near to the evacuation system for LPG produced by EOL refinery. The proposed storage facility will be connected to the existing evacuation system. Total storage capacity planned to have is 32000 Tons in Refrigerated condition, 16000 Tons each of Propane and Butane. The storage will be connected to Essar Jetty in Vadinar through the existing cross country pipeline corridor for import of LPG and coastal dispatch in case required. Similarly the storage will be connected to existing GAIL pipeline for despatch of LPG to North India and to existing Truck Loading Gantry for despatch in this region. 1.3 Site Description The site for the storage is located within Essar Refinery Complex in COT (Crude Oil Tank) area; however it will be barricaded and isolated. The Refinery is located on the state highway no. 25A (Jamnagar to Okha), which eventually connects to NH- 8A. The nearest rail junction is at Modhpur, which is on the broad gauge line connecting Jamnagar and Okha. The nearest airport is at Jamnagar, which is 50 km. (approx) from the proposed location. Some of the key location advantages of Essar Jetty are listed below: Nearest point from Middle East to India and Industries in north and north-western states are dependent on ports on the western coast. Vadinar is strategically located in the Gulf of Kutch between two Islands namely Kalubhar and Narara thereby a sheltered terminal and safe for navigation and berthing. This is an all-weather deep draft terminal having no interruption in operation. The Natural creek helps for very low siltation and hence dredging is not required. Pre Feasibility Report – Proposed LPG Storage Facilities of PTIL, Bharana Page 4 1.4 Site Conditions Essar had appointed different agencies to carry out studies and surveys of the refinery, COT, pipeline corridor and marine facilities. Detail Geo-investigation works for the design and construction of various foundation systems of tanks and other equipments, buildings were carried out at site. The entire geotechnical investigation works consisting of several drill holes, cyclic plate load tests, excavation of trial pits, field permeability tests, field CBR test and electrical resistivity tests were carried out. Based on the results of all the field and laboratory test results, the report was prepared to facilitate the designer in their design work. Similarly, for the entire refinery premises (i.e. refinery, COT, Pipe line corridor) topographical survey was conducted to determine the levels of the ground and a report containing survey maps showing grid wise levels for the entire area was prepared. Since the proposed storage project is being executed within the existing area, the above reports prepared during the construction of existing refinery area are being utilized. 1.5 Rehabilitation and Resettlement Issues The storage will be on the existing available land block, there are no R&R issues. 1.6 Pollution Control Measures: Being LPG storage, the proposed facility is not expected to have any Air, Water and Solid pollution. For the refrigerated storage a flare will be installed to avoid any direct release of LPG in atmosphere. PTIL is getting an Environment Impact study conducted by an accredited consultant, recommendation of which will be strictly followed. 1.7 Project Schedule and Cost Estimates The Project is scheduled to be completed in 24 months after getting all statutory permissions and clearances. The total preliminary costing of the project is estimated at Rs. 430 Cr. This cost includes the cost for storage tanks of 32,000 Tons of LPG/ Propane / Butane and the associated facilities. Pre Feasibility Report – Proposed LPG Storage Facilities of PTIL, Bharana Page 5 2. INTRODUCTION OF THE PROJECT India is a net importer of petroleum products; it requires to import LPG as domestic production is much lower than the demand. LPG import has increased from 2.3 MMT in 2004-05 to 6.6 MMT in 2013 -14. As against the demand of 16.3 MMT in FY 2013-14, domestic production was only
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