Salt Cavern-based Oil Storage Facility

June 3, 2023

Engineers India (EIL), a government-owned engineering consultancy firm, is conducting a study in Rajasthan to assess the potential and feasibility of establishing salt cavern-based strategic oil reserves. This initiative aligns with the Indian government’s objective of enhancing the country’s strategic oil storage capacity. If successful, it would mark India’s first salt cavern-based oil storage facility, complementing the existing three strategic oil storage facilities in Mangaluru, Padur, and Visakhapatnam.

Understanding the Importance of Strategic Crude Oil Reserves

Countries develop strategic crude oil reserves to mitigate major disruptions in the global supply chain. With India being the world’s third-largest consumer of crude oil, relying on imports for more than 85% of its requirements, strategic petroleum reserves (SPRs) play a crucial role in ensuring energy security and availability during global supply shocks and emergencies.

The Current Strategic Oil Storage Capacity in India

India’s existing strategic oil reserves have a capacity of 5.33 million tonnes, equivalent to approximately 39 million barrels of crude. This capacity can sustain the country’s demand for approximately 9.5 days. To further strengthen the SPR, India is expanding its storage capacity by a cumulative 6.5 million tonnes at two locations: Chandikhol in Odisha (4 million tonnes) and Padur (2.5 million tonnes).

Advantages of Salt Cavern-Based Storage Facilities

Salt cavern-based storage facilities offer distinct advantages compared to rock cavern-based storage. Unlike rock caverns that require excavation, salt caverns are created through solution mining, a simpler, faster, and less cost-intensive process. These facilities are naturally well-sealed, enabling rapid injection and extraction of oil. The salt lining inside the caverns acts as an impermeable barrier against liquid and gaseous hydrocarbons, making them ideal for storage. Additionally, salt cavern-based storage can be predominantly operated from the surface, further streamlining operations.

Success Story: The United States’ Strategic Petroleum Reserve

The United States has established the world’s largest emergency oil storage, the Strategic Petroleum Reserve (SPR). It relies on salt cavern-based storage facilities located in salt domes along the Gulf of Mexico coast in Texas and Louisiana. With a cumulative capacity of approximately 727 million barrels, the US SPR serves as a model for successful salt cavern-based strategic oil reserves.

The Potential of Rajasthan for Salt Cavern-Based Storage

Rajasthan, endowed with ample salt formations, offers favorable conditions for the development of salt cavern-based strategic storage facilities. Previous attempts to build a strategic oil reserve in Bikaner did not materialize. However, the partnership between EIL and Germany’s DEEP.KBB GmbH has bridged the technical expertise gap required for salt cavern-based storage. With the upcoming refinery in Barmer and existing crude pipelines, Rajasthan’s infrastructure is conducive to the establishment of strategic oil reserves.

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