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Government Wants Two More Strategic Oil Storage Facilities

Published on June 29, 2018
Cabinet approves establishment of "Strategic Petroleum Reserves" at Chandikhol and Padur.
Government Wants Two More Strategic Oil Storage Facilities

  • The Union Cabinet has approved establishment of additional 6.5 Million Metric Tonne (MMT) Strategic Petroleum Reserves (SPR) facilities at Chandikhol in Odisha and Padur in Karnataka.
  • The Cabinet also approved construction of dedicated SPMs (Single Point Mooring) for the two SPRs.
  • This should not come as a surprise as this decision is in line with Government’s announcement of setting up of two additional SPRs during 2017-18 budget.

Information about the proposed SPR facilities:

  • The SPR facilities at Chandikhol and Padur will be underground rock caverns.
  • They will have capacities of 4 MMT and 2.5 MMT respectively.
  • These facilities will provide an additional supply of about 12 days of petroleum reserves and is expected to augment India’s energy security.
  • They will be built up project under Public Private Partnership (PPP) model to reduce budgetary support of Government of India.
  • The terms and conditions of such PPP participation will 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.
This is not the first time that the Government is going for SPR's:
  • Central Government under phase I of SPR programme has built three underground crude oil storage facilities (Strategic Petroleum Reserves) with total capacity of 5.33 MMT.

These three facilities and their capacities are:

1. Vishakhapatnam (Andhra Pradesh, 1.33 million tonnes).
2. Mangalore (Karnataka, 1.5 million tonnes).
3. Padur (Kerala, 2.5 million tonnes).
  • The above three facilities can provide energy security of 10 days of consumption in response to external supply disruptions.
  • They are maintained by Indian Strategic Petroleum Reserves Ltd (ISPRL), a special purpose vehicle (SPV), which is wholly owned subsidiary of Oil Industry Development Board (OIDB) under Ministry of Petroleum & Natural Gas.
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