khanboy007
FULL MEMBER
- Joined
- May 22, 2012
- Messages
- 1,180
- Reaction score
- 1
- Country
- Location
NEW DELHI: Oil-rich Kuwait and Abu Dhabi are in talks with India to store about 2 million tonne of crude oil in Indian caverns, which the country could use during emergencies such as supply constraint due to geo-political turmoil in producing countries.
Kuwait Petroleum Corporation (KPC) and Abu Dhabi National Oil Company (ADNOC) have confirmed that they are willing to fill crude in two compartments of caverns at Visakhapatnam and Mangalore, government officials and industry executives said.
"This is a win-win proposition. We will have crude oil stored in our country, which can be used whenever we face any supply disruption or sudden spike in oil prices. KPC and ADNOC will be free to trade their inventories but during emergencies, India will have the first right of refusal," an official said requesting anonymity. Countries such as South Korea and Japan, which are hugely dependent on energy imports, have strategic oil storage facilities for secure supplies.
India, which is the fourth biggest energy consumer in the world after the US, China and Russia, has been constructing three facilities with combined capacity of over 5 million tonne and planning to construct four such facilities of 12.5 million tonne in Orissa, Gujarat, Rajasthan and Karnataka, officials said.
India, which imports 80% of crude oil it processes, is the regional refining hub with over 215 million tonne annual capacity, and it can't afford any crude oil supply disruption. In order to ensure energy security of the country, it is planning to significantly augment inventories, which is currently not enough for 30 days.
KPC and ADNOC are keen on storing crude oil in India to tap vast Asian markets because energy imports of America are on a decline due to availability of shale gas at relatively cheaper rates, officials said. "India itself is a vast market for oil producers and they do not want to keep all eggs in one basket by relying on only American demand," an official said.
KPC and ADNOC are interested in twothree storage compartments of the three underground rock caverns that can store about 5.33 million tonne of crude. The capacity of Visakhapatnam storage facility is 1.33 MT, Mangalore cavern can store 1.5 MT of crude and Padur, 2.50 MT. Hindustan Petroleum Corporation LtdBSE 3.54 % and Mangalore Refinery and Petrochemicals LtdBSE -1.98 % have already booked two compartments of 0.3 MT each in Visakhapatnam and Mangalore, respectively.
KPC and ADNOC may not pick up any equity stake in the storage facilities, but they would stock fuel by paying a rent, officials said. "The government has constituted a working group comprising members of all stakeholders, which will finalise commercial details soon," a member of the group said.
Caverns are developed by Indian Strategic Petroleum Reserves Ltd (ISPRL), which is a special purpose vehicle of the Oil Industry Development Board, a statutory body created for India's energy security. According to ISPRL, the capital cost in creating three storage facilities is about Rs 3,958 crore and filling of the 5.03 million tonne of crude would require about Rs 26,400 crore.
Commissioning of Visakhapatnam facility is expected in September this year and Mangalore and Padur projects will be ready by October next year, officials said.
Kuwait, Abu Dhabi may store 2 million tonne crude oil in Indian caverns - The Economic Times
----------------------------------------------------
Kuwait Petroleum Corporation (KPC) and Abu Dhabi National Oil Company (ADNOC) have confirmed that they are willing to fill crude in two compartments of caverns at Visakhapatnam and Mangalore, government officials and industry executives said.
"This is a win-win proposition. We will have crude oil stored in our country, which can be used whenever we face any supply disruption or sudden spike in oil prices. KPC and ADNOC will be free to trade their inventories but during emergencies, India will have the first right of refusal," an official said requesting anonymity. Countries such as South Korea and Japan, which are hugely dependent on energy imports, have strategic oil storage facilities for secure supplies.
India, which is the fourth biggest energy consumer in the world after the US, China and Russia, has been constructing three facilities with combined capacity of over 5 million tonne and planning to construct four such facilities of 12.5 million tonne in Orissa, Gujarat, Rajasthan and Karnataka, officials said.
India, which imports 80% of crude oil it processes, is the regional refining hub with over 215 million tonne annual capacity, and it can't afford any crude oil supply disruption. In order to ensure energy security of the country, it is planning to significantly augment inventories, which is currently not enough for 30 days.
KPC and ADNOC are keen on storing crude oil in India to tap vast Asian markets because energy imports of America are on a decline due to availability of shale gas at relatively cheaper rates, officials said. "India itself is a vast market for oil producers and they do not want to keep all eggs in one basket by relying on only American demand," an official said.
KPC and ADNOC are interested in twothree storage compartments of the three underground rock caverns that can store about 5.33 million tonne of crude. The capacity of Visakhapatnam storage facility is 1.33 MT, Mangalore cavern can store 1.5 MT of crude and Padur, 2.50 MT. Hindustan Petroleum Corporation LtdBSE 3.54 % and Mangalore Refinery and Petrochemicals LtdBSE -1.98 % have already booked two compartments of 0.3 MT each in Visakhapatnam and Mangalore, respectively.
KPC and ADNOC may not pick up any equity stake in the storage facilities, but they would stock fuel by paying a rent, officials said. "The government has constituted a working group comprising members of all stakeholders, which will finalise commercial details soon," a member of the group said.
Caverns are developed by Indian Strategic Petroleum Reserves Ltd (ISPRL), which is a special purpose vehicle of the Oil Industry Development Board, a statutory body created for India's energy security. According to ISPRL, the capital cost in creating three storage facilities is about Rs 3,958 crore and filling of the 5.03 million tonne of crude would require about Rs 26,400 crore.
Commissioning of Visakhapatnam facility is expected in September this year and Mangalore and Padur projects will be ready by October next year, officials said.
Kuwait, Abu Dhabi may store 2 million tonne crude oil in Indian caverns - The Economic Times
----------------------------------------------------
