NEW DELHI: Union Cabinet on Wednesday approved the setting up of two more underground crude oil storage facilities -- one each in Odisha and Karnataka -- in order to increase India's emergency stockpile by 12 days to 22 days.
According to acting finance minister Piyush Goyal, the Cabinet has given in-principle approved the setting up of a 4 million tonne(MT) storage facility at Chandikhole in Odisha and a 2.5 MT facility at Padur in Karnataka. These storages will be in addition to the existing ones at Visakhapatnam (1.33 MT), Mangalore (1.5 MT) and Padur (2.5 MT).
"The total 5.33 MT capacity under Phase-1 of the Strategic Petroleum Reserve (SPR) programme is estimated to supply approximately 10 days of India's crude requirement according to the consumption data for 2016-17. Cabinet's approval for establishing additional 6.5 MT SPR facilities will provide an additional supply of about 12 days and is expected to augment India's energy security," Goyal said.
The government had first announced the setting up of two additional SPRs during the 2017-18 Union Budget. "The SPR facilities at Chandikhole and Padur will be underground rock caverns and will have capacities of 4 MT and 2.5 MT, respectively." the government said.
The in-principle approval from the Cabinet will enable authorities to take up the project under the public-private participation (PPP) model to reduce budgetary support of the Centre. However, the terms and conditions of such participation would be determined by Oil ministry in consultation with Ministry of Finance after conducting road shows to elicit requirements of the market, including prospective investors.