UK based Essar Energy will begin work to upgrade the Vadinar refinery in Gujarat, India, in the third quarter of this year.

The upgrade will allow the refinery to increase its capacity from 300,000 barrels a day to 375,000 bpd, under the $1.8bn phase one expansion project.

The upgraded facility will be able to process heavier varieties of crude oil once it begins production from Q4, 2011.

Plans are also underway to increase the refinery’s capacity to 405,000 bpd, under a optimization project, which is set to begin next year.

The company is expected to complete a total of $4.9bn expansion projects in 2011, reports The Business Standard.

Essar said it will also complete the $350m acquisition of the Stanlow Refinery in UK from Shell later this year.