Strategic Petroleum Reserves Current Affairs
The Union Cabinet has approved establishment of additional 6.5 Million Metric Tonne (MMT) Strategic Petroleum Reserves (SPR) facilities at Chandikhol in Odisha and Padur in Karnataka. It also approved construction of dedicated SPMs (Single Point Mooring) for the two SPRs. This decision is in line with Government’s announcement of setting up of two additional SPRs during 2017-18 budget.
The SPR facilities at Chandikhol and Padur will be underground rockcaverns. They will have capacities of 4 MMT and 2.5 MMT respectively. These facilities will provide an additional supply of about 12 days of petroleum reserves and is expected to augment India’s energy security. They will be built up project under Public Private Partnership (PPP) model to reduce budgetary support of Government of India. The terms and conditions of such PPP participation will be determined by Ministry of Petroleum and Natural Gas in consultation with Ministry of Finance after conducting road shows to elicit requirements of market, including prospective investors.
Central Government under phase I of SPR programme has built three underground crude oil storage facilities (Strategic Petroleum Reserves) with total capacity of 5.33 MMT capacity at Vishakhapatnam (Andhra Pradesh, storage capacity of 1.33 million tonnes), Mangalore (Karnataka, 1.5 million tonnes) and Padur (Kerala, 2.5 million tonnes) to provide energy security of 10 days of consumption in response to external supply disruptions. They are maintained by Indian Strategic Petroleum Reserves Ltd (ISPRL), a special purpose vehicle (SPV), which is wholly owned subsidiary of Oil Industry Development Board (OIDB) under Ministry of Petroleum & Natural Gas.
The UAE’s national oil company Abu Dhabi National Oil (ADNOC) Company has agreed to store crude oil in India’s maiden Strategic Petroleum Reserves (SPRs) storage.
It will be first of its kind deal in which India has partner with other country for storing crude oil in the SPR storage for emergency purpose.
Strategic Petroleum Reserves: India is building underground SPR storages at Visakhapatnam (1.33 million tonnes capacity), Mangalore (1.5 million tonnes) and Padur (2.5 million tonnes) to store about 5.33 million tonnes of crude oil. These SPRs will act as a valuable buffer against short term oil supply disruptions and global price shocks as India is 79 per cent dependent on imports to meet its crude oil needs.
- UAE has agreed to give two-third of the oil to it for free for this purpose. Presently India imports upto 8 per cent of crude oil from UAE.
- ADNOC is keen on taking half of the 1.5 million tonnes Mangalore SPR facility. It will stock 6 million barrels or 0.75 million tons of crude oil in one compartment of this facility.
- Of this, 0.5 million tons of stored crude oil will belong to India and it can use it at the time of emergencies.