New Delhi: The Centre has approved in July the setting up of two underground strategic oil reserves with a total capacity of 6.5 Million Metric Tonnes (MMT) in public private partnership (PPP) mode, Minister of State (MoS) for Petroleum and Natural Gas Rameswar Teli told the Lok Sabha in a written response on Monday. The two underground storage facilities are being developed under Phase-II of the petroleum reserve programme at Chandikhol in Odisha and Padur in Karnataka.
"Under Phase II of the petroleum reserve programme, Government has given approval in July 2021 for establishing two additional commercial-cum-strategic facilities with total storage capacity of 6.5 MMT underground storages at Chandikhol (4 MMT) and Padur (2.5 MMT) on PPP mode," the minister told the Lok Sabha.
Teli told the Lower House of Parliament that the government is currently finalising Request for Proposals (RfP) for setting up these two strategic oil reserves. "The Request for Proposal for building these storage facilities is under finalisation. An amount of Rs 210 crore was allocated in the budget of FY 2020-21 under Phase II for land acquisition, and same has been disbursed to ISPRL," informed the minister.
The oil reserves established are strategic in nature and the crude oil stored in these reserves will be used during an oil shortage event, as and when declared so by the government, the minister said.
Under Phase I of strategic petroleum reserves (SPR) programme, the government, through its Special Purpose Vehicle, Indian Strategic Petroleum Reserve Limited (ISPRL), established oil storage facilities with total capacity of 5.33 Million Metric Tonnes (MMT) at three locations — Vishakhapatnam (1.33 MMT), Mangaluru (1.5 MMT) and Padur (2.5 MMT). When crude oil prices crashed to a historical low in May 2020, all the storage facilities were filled with the cheap crude oil purchased during the period.
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