New Delhi: The second phase of India's strategic petroleum reserve programme is estimated to cost Rs 14,527 crore and will be built through a public-private partnership, with the government's viability gap funding limited to 60 percent of the project cost, Parliament was informed on Thursday.
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Minister of State for Petroleum and Natural Gas Suresh Gopi set out the figures in a written reply in the Lok Sabha. He said the Phase-II expansion, cleared in July 2021, will create an additional 6.5 million tonnes of storage serving both commercial and strategic purposes, split across two locations — 4 million tonnes in Odisha and 2.5 million tonnes in Karnataka. Work on identifying further locations is ongoing, the minister said.
Indian Strategic Petroleum Reserve Ltd (ISPRL) has already put 5.33 million tonnes of capacity in place under the programme's first phase. That total comprises 1.33 million tonnes at Visakhapatnam, 1.5 million tonnes at Mangaluru and 2.5 million tonnes at Padur.
Those caverns entered service over a three-year window between 2016 and 2018. How much crude is held in them at any point shifts according to conditions in the market, Gopi said.
The funding contrast between the two phases was spelt out in the reply. "No Government Budgetary Support was provided for development and construction of SPR facilities under Phase-I. For development of SPR facilities under Phase-II, a public private partnership model is envisaged with a total project cost of Rs 14,527 crore with the viability gap funding (VGF) by the government capped at 60 percent of the total project cost," the minister said.
On additional locations, he added: "Further, assessment of new sites for establishment of additional SPRs is a continuous process."
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Gopi told the House that ISPRL has concluded an arrangement with Abu Dhabi National Oil Company allowing the UAE state producer to use a cavern of 750,000 tonnes capacity at the Mangaluru site.
A separate memorandum of understanding covering strategic collaboration has also been signed between the two, the minister said. He gave no further detail on its contents. The document is non-binding.
Threats capable of interrupting energy supplies are kept under continuous watch and evaluation as part of the effort to shore up energy security and cut exposure to supply risk, Gopi said.
He set out the widening of India's import base: "To strengthen energy security and minimise supply risks, India has significantly diversified its crude oil sourcing portfolio from 27 countries to 41 countries. Similarly, LNG sourcing has expanded from six countries to 15 countries. This diversification has reduced dependence on any particular country, region or transit route and enhanced India's ability to manage supply disruptions and market volatility."
The reserve facilities themselves, he said, serve as a cushion against supply shocks of a short-term nature.
Reducing reliance on imported crude is being pursued along several tracks simultaneously, according to the reply.
"The government has also adopted a multi-pronged strategy to reduce the import dependency on crude oil which, inter alia, include demand substitution by promoting usage of natural gas as fuel/feedstock across the country towards increasing the share of natural gas in economy and moving towards gas based economy, promotion of alternate fuels like Compressed Natural Gas (CNG), Piped Natural Gas (PNG), ethanol, compressed biogas and biodiesel, refinery process improvements, promoting energy efficiency and conservation, efforts for increasing production of oil and natural gas through various policies initiatives, etc," Gopi said.
Measures aimed at lifting domestic oil and gas output, and thereby trimming crude import dependence, are also being pursued, the minister said.
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