India to Build First Private Crude Oil Storage Facility

  • India, the world’s third-largest oil consumer and importer, plans to build its first commercial crude oil strategic storage. 
  • Indian Strategic Petroleum Reserves Ltd (ISPRL), a special purpose vehicle for building and operating strategic petroleum reserves, has invited bids for constructing 2.5 million tonnes of underground storage at Padur in Karnataka. 
  • The storage will be built in a PPP (public-private partnership) model, with private parties designing, building, financing, and operating the storage. 
  • The storage will be leased out to any oil company wishing to store oil and charging a fee. 
  • The project will be awarded to entities that offer the highest financial grant or the premium/fee they want to offer to the authority. 
  • The storage will be used in any emergency situation like supply disruption or war. 
  • The government has provided for Rs 5,000 crore for filling the vacant slots in the caverns in the 2023-24 budget but this plan was deferred.
  • Companies like Adnoc use the strategic storages to hold oil for further sale to users.
Posted in Current Affairs.