Strategic petroleum reserves means
storing crude oil in underground constructed rock caverns. These underground
rock caverns are located on the east and west coast of India. Underground
caverns are considered the safest means of storing hydrocarbons.
To ensure energy security, the
government of India also planned like USA, China and Japan to store crude oil
for strategic reasons as given below :-
1) to meet the emergency situations that leads to
disruption of oil supplies.
2) India's high dependence on import oil mainly from
west Asia.
3) Nearly 80%
of our needs fulfilled by import. This can be disrupted due to political
instability in west Asia, war and conflicts, or accidents or blockades,
sanctions.
4) to reduce High oil inflation impacts , oil prices
may be crossing 100 rupees which has
adverse impact on prices of other commodities.
5) strategic petroleum reserves (SPR) used to plug the
demand -supply gap, providing raw material to oil refineries, to maintain GDP
growth rate,
6) India is the 3rd largest energy consumer after US
and China. There is a global practice to keep the strategic petroleum reserves
of 90 days import. India has long way to go.
What India has done to achieve this strategic
petroleum reserves ?
In 2005, Government of India set up
India strategic petroleum reserves (ISPR) limited , HQ at Noida. Strategic
crude oil reserves, which are state funded to meet emergency situations, allows
a country to meet the short time supply disruptions. International energy
agency (IEA) members maintain emergency oil reserves equivalent to already 90
days of net imports.
At
the time of growing uncertainties in global oil markets, such reserves will
help India to manage supply and price rise . The number of days of reserves
will not be static because as our demand keeps increasing. The number of days
of our reserves also change. In today's demand scenario, refineries have an
inbuilt capacity of 65 days.
There is two phases to construct the strategic
petroleum reserves in India.
Phase 1 involves addition of crude
oil for 10 days with total storage of 5.33MMT reserves . This phase choosen 3
locations east and west coast of India.
It is completed.
To ensure energy security, the
government of India has decided to set up 5.33Million metric tonnes (MMT) of
strategic crude oil storage at 3 locations namely, Visakhapatnam(1.33 MMT),
Manglore(1.5), and Padur -2.5 (near udupi,
karnataka) .only UAE based Abu dhabi National Oil Co (Adnoc) have
committed to India's crude oil reserves programme till date.
Phase 2
strategic reserves is also planned by government in 2 locations to add
reserves for 12 more days with investments of $1.6billion. It consist of
addition of 6.5mmt of total reserves where 4mmt at Chandikhol near Jajpur
Odisha and 2.5MMT at Padur near udupi karnataka.
After completing this phase
India's strategic reserves facilities together support 22 days of India's crude
oil requirements. India's refineries also maintain 65 days of crudeoil storage,
taking the total reserves for 87 days.
The
created and proposed strategic petroleum reserves (SPR) of 11.83 million metric
tonnes is supplied through pipelines and ships.
The
PPP model promises valuable incentives to an array of stakeholders looking to make
profit, logistics and location advantage; availability of low cost underground
storage facility, suitable land parcel and geological settings for creation of
SPR, promising opportunity for financing, to help sustainability of oil market,