The Indian government has approved the development of two new facilities under its strategic petroleum reserves (SPR) programme, which will also be available for commercial use.
The new facilities will form Phase II of India’s SPR programme. The government has authorised its special purpose vehicle, Indian Strategic Petroleum Reserve Limited (ISPRL), to set up the new underground storage facilities at Chandikhol in Odisha and in Padur in Tamil Nadu. The Chandikhol facility whill have a capacity of 4 million tonnes, and Padur will have a capacity of 2.5 million tonnes. The government allocated INR 2.1 billion (€23.9 million) for land acquisition for the facilities under its 2020-21 budget, and this has now been passed to ISPRL.
The information about the new facilities was given in a written reply to India’s lower house, the Lok Sabha, by Shri Rameswar Teli, the Minister of State for Petroleum and Natural Gas on 26 July 2021.
ISPRL’s CEO Shri HPS Ahuja told Argus Media that 20% of the new facilities’ capacity would be traded to hedge against price inflation or supply refiners in urgent need to crude. 30% of the capacity will be leased to third parties.
Phase I of India’s SPR consists of three facilities in Vishakhapatnam (which has a capacity of 1.33 million tonnes), Mangaluru (1.5 million tonnes) and Padur (2.5 million tonnes), all of which are now full, and for use only during an oil shortage, when declared by the government.