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New Delhi: As India seeks to achieve energy security, state run state-run Engineers India Ltd (EIL) is exploring the possibility of developing a salt cavern-based strategic crude oil reserve in Rajasthan.

Addressing the media, EIL CMD Vartika Shukla on Friday said through the recently announced tie up with DEEP.KBB GmbH, Germany, the company would explore development of salt caverns in the country and the company is currently is looking at prospects for such a project in the state of Rajasthan.

“This is a strategic alliance, its a collaborative arrangement wherein DEEP Germany has the technology to prepare caverns where salt deposits are there underground. We have strategic storages in the country close to 5.33 million tonne of crude and they are basically rock caverns, particularly granite caverns and we are already doing execution of two LPG caverns for our other caverns. There are formations in geology which have salt inside. So salt has to be taken out and then the caverns are to be prepared for the storage of crude," she said.

Noting that Indian companies currently do not have the technology for preparing salt caverns for storage of crude oil, the CMD said: “So we have done this alliance to get this technology in the country and this alliance is exclusive. It gives us place not only using this in India and one of the locations we have talked of is Rajasthan where we can have a salt cavern, strategic reserve of crude and it will also help take EIL’s expertise internationally. So, its a win win alliance for both the companies."

She, however, noted that the location for the prospective project has not been decided.

Currently, India has strategic crude oil storages at three locations -- Visakhapatnam, Mangalore and Padur (near Udupi). The construction of the strategic crude oil storage facilities is being managed by Indian Strategic Petroleum Reserves Limited (ISPRL), a special purpose vehicle, which is a wholly owned subsidiary of Oil Industry Development Board (OIDB) under the ministry of petroleum and natural gas. EIL has worked as the project management consultant for the three locations.

The development gains significance as India is a major consumer of petroleum products and about 85% of its energy requirement is met through imports. India has been looking at ways to secure diverse sources of crude oil and an addition to the strategic reserves would boost energy availability in the country.

Speaking of the company’s international operations, the EIL CMD said that the company’s foreign portfolio is growing and the share of international business in its overall operations would only grow further going ahead.

She said that EIL expects to get more orders from the Middle East, where the focus is on maximizing oil production

“There is an upside to increasing production before energy transition kicks in and we want to capture that opportunity, and that opportunity is in the Middle East so therefore we are consolidating there," she said.

The CMD said that EIL had secured business worth around 4700 crore as against the order value of around 1,650 crore in FY22. In the ongoing financial year, the company has already secured business worth around 650 crore with, international business accounting for more than 30% of the total business. This shows a strong start for this fiscal in terms of business growth for the organization.

She further announced that Vizag Refinery Modernisation Project (VRMP) of HPCL, HPCL Rajasthan Refinery project (HRRL), Capacity expansion project of IOCL-Panipat, Cauvery Basin Refinery (CBR) project for CPCL with the combined capital outlay of around $20 billion are some of the recent testimonies of EIL’s mega project implementation in the domestic market.

Some of our mega projects in the oil and gas sector is nearing completion. On domestic front, Vizag Refinery Project is currently at the advanced stage of commissioning having the state-of-the-art Crude Distillation Column designed and implemented by EIL with highest energy efficiency in terms of energy number across the world.

She also said that in line with the company net zero target for 2035, the company is venturing into newer areas like green hydrogen and carbon capture.

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Updated: 26 May 2023, 10:31 PM IST
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