BHUBANESWAR: The Union Cabinet chaired by Prime Minister Narendra Modi on Wednesday approved establishment of additional 6.5 million metric tonne (MMT) strategic petroleum reserve (SPR) facilities at two locations of the country, including one in Odisha. The SPR facilities to be located at Chandikhol in Odisha and Padur in Karnataka will be underground rock caverns and have capacities of 4 MMT and 2.5 MMT respectively. The Centre had announced setting up of two additional SPRs during the budget announcement for 2017-18.
The in-principle approval is to take up the project under PPP model to reduce budgetary support of the Centre. The terms and conditions of such participation, will be determined by the Ministry of Petroleum and Natural Gas in consultation with Ministry of Finance after conducting road shows to elicit requirements of market, including prospective investors, said Union Minister for Petroleum Dharmendra Pradhan. Indian Strategic Petroleum Reserves Limited (ISPRL), a special purpose vehicle of Oil Industry Development Board (OIDB) under the Ministry of Petroleum and Natural Gas, has already constructed underground rock caverns for storage of 5.33 MMT of crude oil at three locations - Visakhapatnam (1.33 MMT), Mangaluru (1.5 MMT) and Padur (2.5 MMT).
The total 5.33 MMT capacity under Phase-I of the SPR programme is currently estimated to supply approximately 10 days of India’s crude requirement, according to the consumption data for FY2016-17. Cabinet’s approval for establishing additional 6.5 MMT strategic petroleum reserve facilities will provide an additional supply for about 12 days and is expected to augment India’s energy security, Pradhan added. The construction phase of SPRs at Chandikhol and Padur is likely to generate significant direct and indirect employment opportunities in the two states.