New Delhi: The government aims to build its first strategic oil reserve facility with a capacity of 1.33 million tonnes at Visakhapatnam in Andhra Pradesh by October 2011, said Rajan K. Pillai, chief executive officer of Indian Strategic Petroleum Reserve Ltd (ISPRL).
The government plans to build such facilities, whose construction is being managed by ISPRL, at three locations in the country to meet local demand for 14-15 days in case of emergencies.
The planned facilities would be in underground rock caverns near the east and west coasts of the country so that they are easily accessible to the refining sector, according to ISPRL’s website.
Underground rock caverns are considered the safest means of storing hydrocarbons, the ISPRL website says.
ISPRL is owned by the Oil Industry Development Board (OIDB), which, according to its website, is controlled by oil secretary S. Sundareshan.
The second facility will be built at Mangalore by November 2012, and will have a capacity of 1.5 million tonnes. A third facility with a capacity of 2.5 million tonnes will be built at Padur by December 2012.
Based on 2005 prices, ISPRL had estimated an investment of Rs2,397 crore ($542.3 million) for the facilities, Pillai said. The cost had now gone up to more than Rs3,000 crore, he said.