House panel suggests government to construct small caverns for crude storage

livemint.com:

₹508 crore for construction of ISPRL Phase-II projects at Chandikhol (Odisha) and Padur (Karnataka) using underground unlined rock caverns storage technology in PPP mode. ISPRL, or Indian Strategic Petroleum Reserves Limited, is a special purpose vehicle owned by the Oil Industry Development Board (OIDB) under the ministry of petroleum & natural gas. Besides, a provision of ₹202.81 crore has been made for payment to ISPRL regarding O&M expenditure for Mangalore (Padur) and Visakhapatnam projects.

In addition, 1.5-2 MMT capacity is proposed to be constructed adjacent to existing caverns at Mangalore. Feasibility of constructing above ground storage at Mangalore and Padur on the existing land is also being looked into. ISPRL is also examining storages in other locations in the country.

Crude storage capacity has become crucial amidst a highly volatile market scenario, especially because of the Ukraine war. India is a net importer of crude oil and imports around 85% of its total energy requirement. To ensure energy security, the government of India decided to set up 5 million metric tonne (MMT) of strategic crude oil storages at three locations – Visakhapatnam, Mangalore and Padur (near Udupi).

These strategic storages would be in addition to the existing storages of crude oil and petroleum products with the oil companies, and would serve as a cushion during any supply disruptions. The construction of the strategic crude oil storage facilities is being managed by ISPRL. Engineers India Limited (EIL) worked as the project management consultant for the three locations.