A crude oil refinery. File picture for illustration.
| Photo Credit: AP
India, the world’s third largest oil client and importer, plans to build its first commercial crude oil strategic storage as a part of efforts to shore up stockpiles as insurance coverage towards any provide disruption.
Indian Strategic Petroleum Reserves Ltd (ISPRL), a particular objective car created by the federal government for constructing and working strategic petroleum reserves within the nation, has invited bids for setting up 2.5 million tonnes of underground storage at Padur in Karnataka, in accordance to the tender doc.
ISPRL had within the first section constructed a strategic petroleum reserve in underground unlined rock caverns for storage of 5.33 million tonnes of crude oil at three places Visakhapatnam (1.33 million tonnes) in Andhra Pradesh and Mangalore (1.5 million tonnes) and Padur (2.5 million tonnes) in Karnataka.
Under Phase-II, it intends to build a commercial cum strategic petroleum reserve in underground unlined rock caverns together with related above floor amenities, together with devoted SPM and related pipelines (offshore and onshore) for storage of two.5 million tonnes of crude oil at Padur-II at a value of ₹5,514 crore.
The Phase-I storages had been constructed at authorities expense.
In the tender, ISPRL stated the Padur-II will likely be constructed in a PPP (public-private partnership) mannequin the place personal events will design, build, finance, and function the storage.
Bidders have been requested to quote the monetary grant they require for the constructing of the reserves or the premium/charge they need to provide to the authority.
The mission will likely be awarded to entities that provide the best premium. Where no bidder is providing a premium, it will go to the one searching for the bottom grant, the tender doc stated.
“Maximum quantum of grant to be quoted for the project shall be capped to ₹3,308 crore,” ISPRL stated. “A bidder who seeks a grant cannot offer any premium.” The operator of Padur-II will lease out the storage to any oil firm wishing to retailer oil and cost a charge. The corporations storing oil can promote it to home refiners. But in case of an emergency, India will maintain the first proper on oil utilization.
Bids are due by April 22 and the tender is to be awarded by June 27, the doc stated.
ISPRL is buying about 215 acres of land for Padur-II.
India, which meets over 85% of its oil wants by way of imports, will use the strategic reserves in any emergency scenario like provide disruption or warfare.
Of the Phase-I reserves, UAE’s Abu Dhabi National Oil Company (Adnoc) has employed half of the two.5 million tonnes storage capability at Padur and 1.5 million tonnes facility at Mangalore. While the remaining 1.25 million tonnes at Padur has been filed by ISPRL, the 0.75 million tonnes of vacant storage at Mangalore is to be leased out.
Out of the 1.33 million tonnes of storage constructed at Visakhapatnam, 0.33 million tonnes was an area that was constructed on the expense and for Hindustan Petroleum Corporation Ltd (HPCL). Of the remaining, HPCL has employed 0.3 million tonnes extra and the remainder of the storage is to be leased out.
The authorities had within the 2023-24 funds offered for Rs 5,000 crore for filling the vacant slots within the caverns however mid-year that plan was deferred. In the interim funds for 2024-25, offered in February, no allocation has been made for the aim.
Companies like Adnoc use the strategic storages to maintain oil for additional sale to customers.
Last month, the federal government allowed Adnoc to export crude oil it has saved in Mangalore reserves to give operational flexibility to the overseas agency.
At current, crude oil, which is the uncooked materials for producing fuels like petrol and diesel, isn’t allowed to be exported besides by way of state-owned Indian Oil Corporation (IOC).
In an order, the Ministry of Commerce and Industry on March 23 stated the situation of export being allowed solely by way of IOC will proceed however “AMI (Adnoc Marketing International (India) RSC Limited India) is exempted from STE conditions and is allowed to re-export crude oil from their commercial stockpile at Mangalore strategic petroleum reserve, at their own cost.” Adnoc had sought permission for the export of its oil from the cavern in circumstances the place it couldn’t discover consumers in Indian refiners.
