By Nidhi Verma
NEW DELHI (Reuters) – India is scouting for overseas oil storage and is in initial talks with Oman to lease a facility to hold about 5 million barrels of crude oil, said L.R. Jain, chief executive of Indian Strategic Petroleum Reserves Ltd (ISPRL).
India, the world’s third biggest oil importer and consumer, imports over 80% of its oil needs and is raising its strategic petroleum reserve capacity to protect against any global supply disruption.
“If the talks with Oman materialise this would be the first time we will be holding strategic storage overseas,” Jain told Reuters, adding his company is looking for storage in other Middle Eastern countries as well.
ISPRL, which manages federal oil inventories, operates three SPRs in southern India – at Vizag in Andhra Pradesh, and Mangalore and Padur in Karnataka – with a combined capacity of about 5.33 million tons.
India is keen to expand its oil storage capacity to be able to join the International Energy Agency (IEA), which requires its members to hold a minimum of 90 days of oil consumption.
India has storage capacity to hold 74 days of crude oil and refined fuels.
ISPRL’s current oil reserves are enough to cover demand for 9.5 days while Indian companies have crude and refined fuel storage facilities for 64.5 days.
Jain said ISPRL will build 4 million tons of strategic storage at Chandikhol in eastern Odisha state and a new 2.5-million ton facility at Padur in Southern India.
He said the new underground SPRs at Chandikhol and Padur will be built in partnership with private companies with the federal government having the first right to the oil in the event of a shortage.
ISPRL is also considering building a 5-million ton underground crude store, and gas reserves at Bikaner in desert state of Rajasthan, he said.
(Reporting by Nidhi Verma; Editing by Alexandra Hudson)
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