Government to establish additional 6.5MMT petroleum reserve in Odisha and Karnataka

The government of India has approved establishment of additional 6.5 million metric tonne (MMT) strategic petroleum reserve (SPR) facilities at two locations – Chandikhol in Odisha and Padur in Karnataka. This will include construction of dedicated SPMs (Single Point Mooring) for the two SPRs.

The reserve facilities at Chandikhol and Padur will be underground rock caverns and will have capacities of 4 MMT and 2.5 MMT respectively. The government had announced setting up of the two additional SPRs during the budget announcement for 2017-18.

The in principle approval is to take up the project under PPP (public-private-partnership) model to reduce budgetary support from the central government. The terms and conditions of such participation, would be determined by the Ministry of Petroleum & Natural Gas in consultation with the Ministry of Finance after conducting road shows to elicit requirements of market, including prospective investors.

The Indian Strategic Petroleum Reserves (ISPRL) has already constructed underground rock caverns for storage of 5.33MMT of crude oil at three locations – Vishakhapatnam (1.33 MMT), Mangalore (1.5 MMT) and Padur (2.5 MMT). The total 5.33 MMT capacity under the Phase-I of the SPR programme is currently estimated to supply approximately 10 days of India’s crude requirement according to the consumption data for FY2016-17.

According to the notification establishing the additional 6.5 MMT SPR facilities will provide an additional supply of about 12 days and is expected to augment India’s energy security.

(Image courtesy: Indian Strategic Petroleum Reserves)