India to store crude oil in US and other foreign nations; to create 6.5 million tonnes domestic storage capacity

IMG_3290.jpg

Union minister of petroleum and natural gas has invited companies to develop 6.5 million tonnes (MT) of crude storage capacities across the country, as the government eyes to increase crude and petroleum products storage capacity from existing 74 days to 90 days.

The government is also exploring overseas crude storage facilities in the US and other commercially viable locations. Speaking at the ‘GCTC Energy Security Conference 2020’, Petroleum and Natural Gas minister Dharmendra Pradhan said that during the low crude oil prices period in April and May 2020, India filled the existing strategic petroleum reserves with 16 million barrels of crude oil, resulting in saving Rs 5,000 crore for the government.

The country’s existing strategic petroleum reserve facilities are located in Visakhapatnam (1.3 MT), Mangaluru (1.5 MT) and Padur (2.5 MT). As per the consumption pattern of FY20, the storages can provide for about 9.5 days of crude oil requirement. State-run oil marketing companies (OMCs) can stock for another 64.5 days.

The government has already given an ‘in-principle’ approval for building two additional storage facilities with total capacity of 6.5 MT under the public-private partnership model at Chandikhol in Odisha (4 MT) and Padur in Karnataka (2.5 MT). According to sources, the government is looking for prospective partners like financial investors, foreign oil companies, and large construction firms to build the proposed oil reserves.

To reduce imports, the government is planning to develop alternative fuels such as ethanol, second generation ethanol, compressed bio gas (CBG) and bio-diesel. “OMCs are in the process of setting up twelve 2G bio-refineries with an investment of Rs 14,000 crore,” the minister pointed out.

The country has set a target of 20% blending of ethanol in petrol and 5% blending of bio-diesel in diesel by 2030. Currently, ethanol blending in petrol is 5.2%, Tarun Kapoor, secretary of the petroleum and natural gas ministry said. Currently, OMCs import crude oil from over 30 countries in Africa, North and South Americas and Southeast Asia. Imports of liquefied natural gas have also been diversified from traditional supplier Qatar to the US, Australia and Russia.

Leave a Reply

Your email address will not be published. Required fields are marked *