ISPRL signs MoU with ADNOC to explore storage of crude oil at Padur underground facility in Karnataka

Indian Strategic Petroleum Reserves Ltd. (ISPRL) has signed Memorandum of Understanding (MoU) with Abu Dhabi National Oil Company (ADNOC) to explore storage of crude oil at Padur underground facility in Karnataka. This follows arrival of final shipment of initial delivery of ADNOC crude to be stored in another ISPRL underground facility in Mangaluru, which will store 5.86 million barrels.

ISPRL is Special Purpose Vehicle (SPV), which is a wholly owned subsidiary of Oil Industry Development Board (OIDB) under Ministry of Petroleum & Natural Gas.

Key Facts

The MoU mandates ADNOC to store crude oil at Padur Strategic Petroleum Reserve which has storage capacity 2.5 million-tonne (~17 million barrels) capacity for emergency needs. ADNOC will store crude in two compartments at Padur.  ADNOC is only foreign oil and gas company, so far to invest, by way of crude oil in India’s strategic petroleum reserves program. This will help to ensure energy security to India and enable ADNOC to efficiently and competitively meet Indian market demand.

Background

Under the Phase I of Strategic Petroleum Reserves Program, SPRL has already built 5.33 million tons of underground storage capacity at three locations, Visakhapatnam (1.33 million tons), Mangalore (1.5 million tons) and Padur (2.5 million tons), that can meet around 10 days of the country’s oil needs. In June 2018, Government announced phase II of program for creation of two new reserves, a 4-million-tons storage facility at Chandikhol in Odisha, and an additional 2.5-million-tons facility at Padur. The combined strategic reserve capacity of existing and newly announced facilities will be 15.33 million tons and will provide around 22 days of emergency coverage for India’s crude oil requirements.

Month: Current Affairs - November, 2018