India’s authorities has requested state-owned Oil and Pure Gasoline Corp (ONGC) to construct and fill a brand new website for strategic petroleum reserves, with an estimated funding of $1.6 billion, native outlet the Financial Instances reported on Friday, quoting sources with information of the plans.
The federal government is seeking to increase India’s power safety within the wake of the Iran conflict and the next oil provide disaster that India felt firsthand, with a hovering power import invoice and rising costs of fuels.
At present, India’s underground Strategic Petroleum Reserve storage has a whole capability of 5.33 million metric tons of crude oil, equal to solely 39 million barrels of crude oil, or eight days’ price of India’s oil consumption.
The storage websites are situated in Vishakhapatnam within the state of Andhra Pradesh, and Mangaluru and Padur within the state of Karnataka.
The brand new website shall be at Mangaluru with a proposed capability of 1.75 million metric tons. The brand new underground cavern, on whose building and filling ONGC might should spend $1.6 billion, would elevate India’s whole oil storage capability by one third, in line with Financial Instances’ sources.
It was not instantly clear if the brand new storage website would solely maintain strategic authorities reserves or if it may act as a business storage website, too.
India has been seeking to increase its strategic oil storage capability for years amid rising demand, with progress charges which have lately exceeded China’s.
The present oil provide disaster in the course of the Center East battle seems to have accelerated the plans so as to add extra capability to carry strategic petroleum reserves.
India’s storage of 39 million barrels of oil, or simply a couple of week of its roughly 5 million barrels per day of consumption, is nicely beneath the SPRs of many different massive oil shoppers, which exposes New Delhi’s vulnerability to sudden provide shocks.
By Tsvetana Paraskova for Oilprice.com
