The Cabinet has approved setting up of 4 million tonnes (MT) storage at Chandikhole in Odisha and 2.5 MT storage at Padur in Karnataka, Finance Minister Piyush Goyal told reporters in New Delhi. The meeting was chaired by Prime Minister Narendra Modi. The storages will be added to the existing rock caverns to shore 5.33 MT of crude Visakhapatnam (1.33 MT), Mangalore (1.5 MT) and Padur (2.5 MT). “The total 5.33 MT capacity under Phase-1 of the Strategic Petroleum Reserve (SPR) programme is estimated to supply approximately 10 days of India’s crude requirement according to the consumption data for 2016-17.
Cabinet’s approval for establishing additional 6.5 MT SPR facilities will provide an additional supply of about 12 days and is expected to augment India’s energy security. Then finance minister Arun Jaitley had announced plans to build two more storages with a combined capacity of 10 MT at Chandikhole and at Bikaner in Rajasthan.
The approval includes construction of dedicated SPMs (Single Point Mooring) that would be used for importing crude oil for the two SPRs. The in-principle approval is to take up the project under PPP model to reduce budgetary support of the Centre, it said. The terms and conditions of such participation would be determined by Oil ministry in consultation with Ministry of Finance after conducting road shows to elicit requirements of the market, including prospective investors.
The government’s strategic reserves in India are run by the Indian Strategic Petroleum Reserves Ltd, an SPV set up by the Oil Industry Development Board, under the petroleum ministry. The first phase of the reserves was built at a cost of Rs 4,098.35 crore.