UAE’S Adnoc to store oil in In­dia’s first ever strate­gic stor­age ven­ture

Resource Digest - - CONTENT -

In a first of its kind deal, UAE’S na­tional oil com­pany Adnoc has agreed to store crude oil in In­dia’s maiden strate­gic stor­age and give two-third of the oil to it for free. In­dia, which is 79 per cent de­pen­dent on im­ports to meet its crude oil needs, is build­ing un­der­ground stor­ages at Visakha­p­at­nam in Andhra Pradesh and Man­ga­lore and Padur in Kar­nataka to store about 5.33 mil­lion tonnes of crude oil to guard against global price shocks and sup­ply dis­rup­tions.

Abu Dhabi Na­tional Oil Com­pany (ADNOC) is keen on tak­ing half of the 1.5 mil­lion tons Man­ga­lore fa­cil­ity, Oil Min­is­ter Dhar­men­dra Prad­han said. It will stock 0.75 mil­lion tons or 6 mil­lion bar­rels of oil in one com­part­ment of Man­ga­lore fa­cil­ity. Of this, 0.5 mil­lion tons will be­long to In­dia and it can use it in emer­gen­cies. Adnoc will use the fa­cil­ity as a ware­house for trad­ing its oil.

The 1.33 mil­lion tons Visakha­p­at­nam stor­age and 2.5 mil­lion tons Padur stock­piled to­gether with 1.5 mil­lion tons Man­ga­lore stor­age will be enough to meet the na­tion’s oil re­quire­ment for about 10 days. Af­ter talks with vis­it­ing UAE Min­is­ter for En­ergy Suhail Mo­hammed Al Mazrouei,

Prad­han said tax is­sue re­mains to be sorted out be­fore Adnoc can be­gin stor­ing oil at Man­ga­lore.

Congress-ruled Kar­nataka govern­ment has not yet agreed on waiv­ing VAT on the crude oil im­ported for the strate­gic stor­age, which UAE wants to use to stock oil when prices are low and sup­ply to its cus­tomers when rates are good.

“This will be be­gin­ning of our strate­gic ties,” he said, adding that Prime Min­is­ter Naren­dra Modi’s visit to UAE in Au­gust last year, the first by an In­dian Prime Min­is­ter in 38 years, laid the foun­da­tion of closer co­op­er­a­tion. UAE had then com­mit­ted to in­vest USD 75 bil­lion in In­dia, and Prad­han show­cased to Mazrouei op­por­tu­ni­ties for that in­vest­ment. “We have of­fered them re­fin­ery projects, petro­chem­i­cal plans, pipe­lines and LNG ter­mi­nals for in­vest­ment,” he said.

On of­fer was 26 per cent stake for USD 700 mil­lion in ONGC’S about-to-be-com­mis­sioned petro­chem­i­cal pro­ject at Da­hej in Gu­jarat and 24 per cent equity for USD 200 mil­lion in ex­pan­sion be­ing planned by BPCL of its sub­sidiary Bina re­fin­ery in Mad­hya Pradesh from 6 mil­lion tons to 7.5 mil­lion tons.

Also, an in­vest­ment of USD 530-850 mil­lion can get the UAE 25-40 per cent stake in HPCL’S planned petro­cehmi­cal plant on the Andhra coast, he said, adding that the Gulf na­tion can also in­vest in the planned 60 mil­lion tons in Maharashtra and the Jagdish­pur-hal­dia and Paradip-su­rat gas pipe­lines.

PM MODI BREAKS PRO­TO­COL TO WEL­COME UAE CROWN PRINCE

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