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OPEC bulletin 2–3/14
now working on various funding options, while a project
advisor, SBI Markets, had been asked to suggest alter-
nate means.
Oil storage facilities
The report said the government hadalready approved the
second phase of the strategic storage, comprising 12.5
million tons of crude reserve capacity in four caverns —
at Bikaner in northwestern Rajasthan; Rajkot in western
Gujarat; Padur in southern Karnataka; and Chandikhol
in eastern Orissa.
India will join fellow oil importers China and Japan in
providing emergency oil storage facilities.
According to reports, China plans to provide around
500 million barrels in strategic oil storage capacity by
2020 from its current capacity of over 160m b.
Meanwhile, Japan’s strategic crude oil inventories
stood at 590m b at the end of December 2012.
India set to launch first
strategic crude storage unit
In amove that follows its fellowAsian oil importers, India
is planning to launch its first strategic crude oil storage
facility in August.
The unit, to be located in southern Andhra Pradesh,
will have the capacity to hold 1.33 million tons, or 9.75
million barrels, of crude oil.
Rajan Pillai, Chief Executive Officer of India
Strategic Petroleum Reserves (ISPRL), was quoted by
the
International Oil Daily
as saying that the move was
aimed at boosting the South Asian nation’s oil import
requirements.
Cushion against disruptions
India, which is the world’s fourth-largest energy con-
sumer, is striving to set up a reserve that, by 2020, will
give the country 90 days’ cover of crude oil imports and
thus provide a cushion against supply disruptions and
extreme price volatility.
ISPRL has been mandated by the government to set
up the storage unitsandoversee their replenishment and
any release of stocks.
The full programme entails plans to commission a
total capacity of 5.3 million tons (38.85 million barrels)
at three locations — Visakhapatnam in Andhra Pradesh,
and Padur and Mangalore in southern Karnataka state.
The project is already late in coming, due to delays in
selecting suitable storage sites, while budget costs have
also spiraled.
Following a request from parliament, India’s oil min-
istry has been looking at using underground storage cav-
erns, as well as utilizing floating barges, or identifying
proven and extractable oil wells and declaring them as
strategic reserves.
Theministry told parliament in February that the cost
of constructing caverns in India would be lower than that
inother overseasmarkets, whilepointingout that floating
barges would leave the country open to external threats.
The government has since estimated that it will cost
234.77 billion rupees ($3.77bn) to fill the caverns.
Pillai was quoted as saying that the government was
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