NEW DELHI: India's quest for energy security got a major push on Wednesday after a pact that will see crude oil for strategic storage flow in from a state-run company of Abu Dhabi for meeting unexpected future exigencies.
The agreement was entered into between two state-run companies -- the Indian Strategic Petroleum Reserves Ltd and the Abu Dhabi National Oil Company.
"Our energy partnership is an important bridge in our linkages. It contributes to our energy security," Prime Minister Narendra Modi said, after overseeing the signing of the agreement and talks with the visiting Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed Al Nahyan.
"His Highness and I discussed ways to transform our energy ties in a strategic direction through specific projects and proposals. In this regard, long-term supply contracts and establishment of joint ventures in the energy sector can be beneficial avenues."
Since India imports nearly 80 percent of its oil requirements, the government had decided to set up oil storages as a cushion against external supply disruptions, as also during emergencies. These storages, typically in rock caverns, are in addition to the existing ones of oil companies.
"This agreement aims to establish a framework for the storage of crude oil by Abu Dhabi National Oil Company in India and to further strengthen the strategic relationship between the two countries in the field of energy," said a statement from India's External Affairs Ministry.
UAE contributes in a major way to India's energy security, being the sixth-largest supplier of crude oil. India is the second-largest destination for UAE's oil exports.
India formed a separate company -- the Indian Strategic Petroleum Reserves Ltd -- to execute the crude reserves plan. Three such projects were finalised under phase one with a total capacity of 5.33 million tonnes.
Under the second phase, reserves of 12.5 million tonnes will be built, to take the total to 17.83 million tonnes. This apart, there are also concrete plans for a capacity of 10.0 million tonnes -- 4.4 million tonnes at Chandikhol in Orissa and 5.6 million tonnes at Rajasthan's Bikaner.