£4bn Ellesmere Port oil business Essar Oil (UK) strikes new deal to expand into the lucrative London and the South East market. Tony McDonough reports

Oil refinery business Essar Oil (UK) says it has agreed a new deal that will see a significant expansion in London and the South East.

Essar has its main headquarters and refinery at Stanlow close to Ellesmere Port. Generating around £4bn in revenues each year, the business employs around 800 people at Stanlow and supplies 16% of all UK road fuels as well as jet fuel for airports.

Now the business has signed an agreement with Oikos Storage (Canvey Island) to expand fuel distribution into new markets beyond its traditional North West and Midland regions and into London and the South East.

Oikos is an Essex-based storer of refined petroleum products. Under the agreement, Essar will store and distribute middle distillate fuels at Oikos’ Canvey Island facility to serve the Thames region. 

This deal will leverage Oikos’ connectivity to the United Kingdom Oil Pipeline (UKOP) system to supply the Northampton and Midlands regions.

Currently diesel and jet fuels are pumped from the Stanlow refinery to the Midlands and Northampton regions along the UKOP system.

As a result of this deal, Essar’s imports of middle distillates will be pumped from Oikos to Northampton and the Midlands regions, providing significant supply resilience and increasing Essar’s security of supply proposition.

It will also see Essar gaining access to the largest market in the country, the Thames region, providing alternative supply options to customers in the area.

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Deepak Maheshwari, chief executive of Essar Oil UK, said: “This agreement represents a significant step in Essar’s strategic downstream ambitions, boosting capacities and ability to meet demand at Northampton and Kingsbury.

“We are delighted to be working with Oikos to gain access to the largest market in the country, leveraging our strong automotive fuel expertise to serve existing and new markets across London and the South East.”

Carlos Rojas, chief marketing Officer of Essar Oil UK, added: “Supply resilience and security of supply are paramount for our customers.

“This agreement is a testament of Essar’s commitment to strengthen our supply proposition in the Midlands whilst opening the opportunity to extend our winning customer offering to customers in the Thames region.”