India approves setting up of additional strategic petroleum reserves
The Indian Government has approved the establishment of additional 6.5 million metric tonne (MMT) Strategic Petroleum Reserve (SPR) facilities at two locations, i.e. Chandikhol in Odisha and Padur in Karnataka, including construction of dedicated SPMs ( Single Point Mooring) for the two SPRs. The SPR facilities at Chandikhol and Padur will be underground rock caverns and will have capacities of 4 MMT and 2.5 MMT respectively. The government had announced setting up of two additional SPRs during the budget announcement for 2017-18.
The in-principle approval is to take up the project under PPP model to reduce budgetary support of the Government of India. The terms and conditions of such participation would be determined by the Ministry of Petroleum and Natural Gas in consultation with the Ministry of Finance after conducting road shows to elicit requirements of the market, including prospective investors.
The Indian Strategic Petroleum Reserves Ltd (ISPRL) has already constructed underground rock caverns for storage of 5.33 MMT of crude oil at three locations, viz. Vishakhapatnam (1.33 MMT), Mangalore (1.5 MMT) and Padur (2.5 MMT). The total 5.33 MMT capacity under Phase-I of the SPR programme is currently estimated to supply approximately 10 days of India’s crude requirement according to the consumption data for FY2016-17.
The cabinet’s approval for establishing additional 6.5 MMT Strategic Petroleum Reserve facilities will provide an additional supply of about 12 days and is expected to augment India’s energy security. The construction phase of the SPRs at Chandikhol and Padur is likely to generate significant direct & indirect employment opportunities in the states of Odisha and Karnataka.