<div>Essar Energy said an expansion in refining capacity and the ability to better process lower-cost heavy crude oils helped firm up refining margins in the third quarter.</div><div> </div><div>Essar Oil, India's second largest private refiner, said current price gross refining margin rose to $9.75 per barrel at its Vadinar refinery in the western Indian state of Gujarat, up from $2.82 per barrel last year.</div><div> </div><div>Refining margin at its Stanlow refinery in the United Kingdom rose to $5.59 per barrel from $2.45 a barrel a year earlier.</div><div> </div><div>The company's oil refining unit, Essar Oil, said last month that EBITDA grew over 8 times to 12.42 billion Indian rupees ($231.95 million) for the quarter.</div><div> </div><div>Margins at Vadinar rose thanks to an expansion of refining capacity to 405,000 barrels per day from 300,000 barrels, combined with an increased ability to refine heavier low-cost crude oils into high-value products like diesel and jet fuel.</div><div> </div><div>At Stanlow, margins rose as the company improved current-price refining margins by $1 per barrel. Essar is aiming to improve current-price refining margins by $3 a barrel by 2014.</div><div> </div><div>Essar Energy, 77 per cent-owned by privately held Indian conglomerate Essar Group, also said it was working towards meeting conditions laid down by India's federal government that would allow it to mine coal from the Mahan coal block in the central state of Madhya Pradesh.</div><div> </div><div>The company received forest clearance for the Mahan coal block in October, bringing Essar a step closer to supplying coal to its captive power project in Madhya Pradesh.</div><div> </div><div>Shares in the company were up 2 per cent at 144 pence at 0810 GMT on the London Stock Exchange on Monday.</div><div> </div><div>(Reuters)</div>