A week after the cabinet approved the replenishment of the underground strategic oil reserve in Padua, Karnataka by foreign oil companies, Abu Dhabi National Oil Co. (ADNOC) signed an initial agreement with the Indian Strategic Petroleum Reserve (ISPRL) on Monday, another such agreement by This year in UAE.
In the first phase, India has built a strategic backup capacity of 5.3 million tonnes (MT) at three locations – Vishakhapatnam (1.33 MT), Mangaluru (1.5 MT) and Padur (2.5 MT) – at the price of 4,098 crore. In the second phase, the ISRPL wants to develop two more caves – the other in Padua and the other in Chandikhol – with a combined storage capacity of 6.5 MT at a cost of 11,000 kroons.
Created in June 2004, ISPRL is a vehicle intended for special purposes owned by the Petroleum Industry Development Committee under the Ministry of Petroleum and Natural Gas and is responsible for the development and maintenance of underground caves for storage of crude oil to alleviate shortcomings in the disruption of supply.
When fully completed, these reserves can take 21 days for India in case of emergency. This will be next to the 65 day stock held by oil companies in warehouses.
ADNOC is the only company to sign the final reserves contracts, while Saudi Arabian national oil company Saudi Aramco has taken interest. Minister of Petroleum Products Dharmendra Pradhan said earlier that some trading companies also expressed interest in participating in the Indian Strategic Reserve Program.
The agreement between ISPRL and ADNOC was signed in Abu Dhabi in the presence of the Minister of State Pradhan and the UAE and General Director of the ADNOC Group, Sultan Ahmed Al Jabber.