Foreign players eye strategic petroleum storage reserves in Mangaluru

The Indian Strategic Petroleum Reserve (ISPRL) is preparing to lease out one of the 0.75 million tonnes-capacity storage caverns it operates in Mangaluru, and foreign players are interested, sources said on the sidelines of India Energy Week 2024.
 

With this, the entire Mangaluru Strategic Petroleum Reserve (SPR), which includes two caverns of 0.75 million tonnes capacity each, will be leased out.

The Abu Dhabi National Oil Company (ADNOC) has been storing crude in one of the caverns since 2018 and signed an agreement to use the Padur facility as well.
 

The expression of interest (EoI) on this is being prepared and foreign parties, including Kuwait, are interested.
 

A special purpose vehicle (SPV), ISPRL is a wholly-owned subsidiary of the Oil Industry Development Board (OIDB) under the Ministry of Petroleum & Natural Gas.

ISPRL manages 5.33 million metric tonnes (MMT) of strategic crude oil storage in three locations — Visakhapatnam, Andhra Pradesh, and Mangaluru and Padur (Near Udupi) in Karnataka.

The Visakhapatnam facility, with 1.33 MMT capacity, was commissioned in June 2015, while Mangaluru (1.5 MMT) and Padur (2.5 MMT) were commissioned in October, 2016, and December, 2018, respectively.
 

The crude oil storages are constructed in underground rock caverns and located on the Eastern and Western coasts. Crude oil from these caverns can be supplied to oil refineries either through pipelines or via a combination of pipelines and coastal movement.

Underground rock caverns are considered the safest means of storing hydrocarbons.
 

ISPRL is also constructing two other commercial-cum-strategic reserves under Phase II at Chandikhol, Odisha (4MMT), and expanding the Padur facility by 2.5 MMT. The Cabinet had given its nod to both the proposals.

Expanding storage

With an eye on quickly expanding the national storage capacity, ISPRL officials said the search is on to expand the number of sites. Salt caverns are being seriously considered as a realistic option to store gas, they said.
 

”The broad plan is to have 80 per cent of the storage volume in oil wells with finished capacity, called 'spent wells' and the rest in salt caverns. These are located mostly on or near the Western coast,” he said.
 

According to submissions made by the Petroleum and Natural Gas Ministry in Parliament, the three facilities combined provide for about 9.5 days of national crude oil requirement.

In addition, oil marketing companies (OMCs) have storage facilities for crude oil and petroleum products for 64.5 days.