Cabinet approval for adding 6.5 MMT oil reserves to ensure 12 more days of supply

Cabinet approval for adding 6.5 MMT oil reserves to ensure 12 more days of supply

- in Defense & Security, Energy, Governance
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New Delhi: Centre has approved establishment of additional 6.5 Million Metric Tonne (MMT) Strategic Petroleum Reserve (SPR) facilities at two locations- Chandikhol in Odisha and Padur in Karnataka, including construction of dedicated SPMs (Single Point Mooring) for the two SPRs. Government had announced setting up of two additional SPRs during the budget announcement for 2017-18.

“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,” a release said.

The SPR facilities at Chandikhol and Padur will be underground rockcaverns and will have capacities of 4 MMT and 2.5 MMT respectively, it added.

As per the release “the in principle approval is to take up the project under PPP (Public Private Partnership) model to reduce budgetary support of the government.”

The terms and conditions of such participation, would be determined by Ministry of Petroleum and Natural Gas in consultation with Ministry of Finance after conducting road shows to elicit requirements of market, including prospective investors.

ISPRL has already constructed underground rock caverns for storage of 5.33 MMT of crude oil at 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, it said.

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.

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