NEW DELHI: India Strategic Petroleum Reserves (ISPRL), a petroleum ministry arm, will come up with an expression of Interest (EOI) to lease out vacant oil caverns in the country.
Its managing director LR Jain said he is expecting Indian oil marketing companies (OMCs), as well foreign ones, to use the facility. India has overhauled its strategic petroleum reserve (SPR) policy that allows commercial sale of crude to boost private participation in the building of new storage facilities. The purpose is to cut down government spending on filling up the available capacity in the caverns.
“We are soon to come up with EOI for reserve in the country. This time I am also expecting companies from foreign to apply for it,” said Jain.
Strategic reserves are meant to use oil in case of oil shortage or oil emergency in the world. India has three storage facilities with a combined capacity of 5.33MMT. In 2021, India had approved the establishment of two additional commercial-cum-strategic facilities with total storage capacity of 6.5 MMT at Chandikhol (4 MMT) in Odisha and Padur (2.5 MMT) in Karnataka, on a Public Private Partnership (PPP) mode.
The completion of phase two will take India’s SPR capacity to 11.83 MMT. Currently, Abu Dhabi National Oil Company (ADNOC) has leased 1.25 million tonne (of 2.5 million tonne) at the Padur reserve and 0.75 million tonne (of 1.5 million tonne) at Mangalore. A 0.33 million tonnes of storage built at Visakhapatnam is for Hindustan Petroleum Corporation Limited.
Now the rest of reserves the government is planning to lease. The government has cut down its budget to to top up the reserve oil in this interim budget. Last year, it had had allocated `5,000 crore for 2023-24 (FY24) to fill up vacant capacity in the underground caverns.