Essar Group has awarded a $350 million (approx Rs.1,680 crore) EPC contract for its 10.5 million tpa Vadinar refinery project in Gujarat to Singapore-based SembCorp Engineers & Construction.

According to the contract, SembCorp will provide project management, procurement of equipment and construction management to complete the long-pending refinery project by November 2006.

Work on the refinery project is likely to start in mid-December 2005. The refinery would focus on middle distillates like superior kerosene oil and high speed diesel, which form over 60 per cent of the country's demand for petroleum products. It will also produce LPG and lead-free motor gasoline (petrol) for various octane levels for the domestic market and lead-free gasoline for exports.

The site will be linked to the Kandla-Bhatinda product pipeline through the Vadinar-Kandla pipeline, giving it access to markets in north India.

The Vadinar refinery project, being implemented by Essar Oil, has been stymied by delays since 1995. It was the first petroleum refinery project to be announced following the government's decision to privatize the industry.