India, the world’s third-largest crude oil importer, which depends on imports for about 85% of its daily consumption, considers building three new sites to raise its strategic petroleum reserves.
Engineers India Ltd, a state-run engineering consultancy, is doing feasibility studies, L R Jain, chief executive at the state company managing the reserve, Indian Strategic Petroleum Reserve Ltd, told Reuters on Wednesday.
“In case of exigencies, we will be better prepared,” Jain said.
Currently, India’s underground Strategic Petroleum Reserve storage has a total capacity of 5.33 million metric tons of crude oil, equal to only 39 million barrels of crude oil, or eight days’ worth of India’s oil consumption.
The storage sites are located in Vishakhapatnam in the state of Andhra Pradesh, and Mangaluru and Padur in the state of Karnataka.
Private companies, including Abu Dhabi National Oil Company (ADNOC), have been using and storing petroleum at the existing SPR sites.
With spiking petroleum demand and about 85% of its crude coming from imports, India is now looking to expand its SPR storage sites.
India’s storage capacity, including the SPR and other sites held by private companies and in transit, is currently enough to meet the country’s fuel demand for 75 days.
“We are looking for 90 days of reserves,” Jain told Reuters, adding that India needs additional storage sites as fuel demand keeps rising.
Reserves of at least 90 days of worth of oil consumption would allow India to join the International Energy Agency (IEA), which requires members to have a minimum of 90 days of oil reserves.
The new sites proposed for India’s SPR include another site at Mangalore, salt caverns in Bikaner in the desert state of Rajasthan in northwestern India, and a site at Bina in the central state of Madhya Pradesh, Jain told Reuters.
By Charles Kennedy for Oilprice.com
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