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With global crude oil prices having dropped to under $50 barrel levels amid a supply glut, the Indian government has been giving attention to developing the country's strategic petroleum reserves for enhanced energy security.
Earlier this week, Petroleum Secretary K.D. Tripathi, along with senior officials of state-run Indian Strategic Petroleum Reserves Ltd (ISPRL) and Engineers India Ltd (EIL), visited the proposed petroleum storage site at Chandikhol in Odisha, a Petroleum Ministry statement here said.
"The underground storage facilities at Chandikhol will be created within the available government-owned land parcel, and would involve a significant development in the region with the greater objective of Odisha becoming the energy gateway of the Eastern and Northeastern region of India," the statement said.
"The estimated capital cost of the Chandikhol project is approximately Rs 5,000 crore," it added.
The first phase of implementing India's strategic oil reserves would be completed by end of this fiscal with over 5 million tonnes (MT) of crude reserves in place in three separate storage facilities. The facilities entail storage of crude oil in underground rock caverns.
"Under Phase I storage program, three facilities have been created at Vishakhapatnam, Mangalore and Padur, with a total storage capacity of 5.33 MT," the ministry said.
Petroleum Minister Dharmendra Pradhan had told reporters earlier this year that preparations had started for the second phase of construction where it is planned to build reserves of 12.5 MT, so that by the end of the second phase India has strategic reserves of around 17.8 MT.
"Government is considering the proposal for establishment of Phase II storage program for a total storage capacity of 10.0 MT, which includes 4.4 MT storage capacity at Chandikhol and 5.6 MT storage capacity at Bikaner (Rajasthan)," the ministry said in a statement on Saturday.
India imports nearly 80 percent of its oil requirements, and the government had decided to set up strategic crude oil storages as a cushion against external supply disruptions. These storages would be in addition to the existing ones of the oil companies.
The construction of the storage caverns is being managed by ISPRL, which is a special purpose vehicle created by the Oil Industry Development Board (OIDB)
