India to commission 5-mt underground oil storages by October.

India has decided to commission over 5 million tonnes of underground crude oil storages by October to ensure uninterrupted oil supply to the nation for about two months in the case of disruptions in imports from oil producing countries due to geopolitical reasons.

The first strategic oil reserve of 1.33 million tonnes will be ready in Visakhapatnam by next month, officials said, adding that this will be followed by two more facilities in Mangalore (1.5 mt) and Padur (2.5 mt) in the next eight months.

'Together, the three projects will store crude oil for 13 days. To ensure energy security for 90 days, we will require additional 13.32 mt capacity storages. That will be achieved in the second phase,' said an official, requesting not to be named.

Four more caverns of 12.5 million tonnes capacity will be built in the second phase, for which the locations that have been identified include Bikaner, Rajkot, Chandikhol and Padur, the official added.

The caverns are being developed by Indian Strategic Petroleum Reserves Ltd. (ISPRL), a special purpose vehicle of the Oil Industry Development Board, a statutory body created for India's energy security. According to ISPRL, the capital cost of creating three storage facilities is about Rs. 3,958 crore and filling them with 5.03 million tonnes of crude oil will require about Rs. 25,000 crore.

India - the fourth-biggest energy consumer in the world after the US, China and Russia - depends on imports for more than 80% of crude oil it processes for domestic consumption.

At present, the country can store crude oil in storage tanks of refiners and oil pipelines for less than 45-50 days.


HBL