Essar Energy (ESSR.L) has confirmed its acquisition of Royal Dutch Shell's (RDSA.L) Stanlow refinery in Cheshire in a deal worth $350 million (£219 million).

The India-focused energy company will acquire the second largest UK oil refinery, which will give it direct access to the UK market.

Naresh Nayyar, chief executive at Essar, said, 'Stanlow is a high quality refinery and is an excellent fit with our strategy.

'We look forward to taking ownership of Stanlow in due course and making operational improvements which will enhance production and better optimise the facility.'

The acquisition for the 270,000 barrell-per-day refinery located near Ellesmere Port is due to be completed later this year.

A separate payment will be made for the the crude oil, refined products and other inventory at the Stanlow site, based on market prices and valued at cost.

A market statement from Royal Dutch Shell said a total consideration of $1.3 billion for the refinery and local marketing businesses.

Mark Williams, downstream director at Shell, said the sale was part of its drive to 'concentrate' the global manufacturing portfolio on larger assets.

Frank Willsdon, general manager of the Stanlow refinery, added, 'This deal serves Stanlow's future well given Essar's commitment to investment and intent to increase site throughputs.'

Essar will also enter an exclusive five year crude supply contract with Shell, while long-term agreements will be put in place for supply of products in the UK by Essar to Shell.