New Delhi: State-run explorer Oil and Natural Gas Corp. Ltd, or ONGC, is setting up a strategic petroleum reserve, or SPR, in Rajasthan—a storage facility to hold crude oil—that it expects to complete by December, a senior company official said.
This would be India’s fourth SPR. These are meant to ensure that consumption of crude oil in the country is not affected during any disruption in global supplies.
“We are building this reserve as we have been asked by the ministry of petroleum and natural gas to do so. We are already doing drilling for the reserve,” said a senior ONGC official, requesting anonymity. “As the formation is filled with salt, it will be easier to wash it and use it as a storage facility.”
He refused to disclose details such as the size of the reserve or the investment required, citing security reasons.
The Rajasthan SPR will be in addition to the three locations that have already been finalized by the government at Visakhapatnam in Andhra Pradesh (with a capacity of 1.33 million tonnes, or mt), Mangalore (1.5mt) and Padur (2.5mt), both in Karnataka. These reserves will be in addition to the stocks held by the country’s oil refineries.
India, which is the world’s fifth largest energy consumer, imports 75% of its crude requirements and accounts for some 3.5% of global consumption.
India uses about 112mt of petroleum products a year. Its petroleum consumption is expected to rise to 135mt per annum by 2012, according to International Energy Agency.
The country plans to make a modest beginning and set up facilities to hold 5mt of crude to sustain two weeks of consumption, as compared with a 90 days of reserve recommended by the Planning Commission, India’s apex planning body.