India, which is 79% dependent on imports to meet its crude oil needs, is building underground storages at Visakhapatnam in Andhra Pradesh and Mangalore and Padur in Karnataka to store about 5.33 million tonne (mt) of crude oil.
This is enough to meet nation's oil requirement for 13-14 days.
The storage at Visakhapatnam is expected to be commissioned in January 2014, Moily said here.
The Visakhapatnam facility would have the capacity to store 1.33 mt of crude oil in underground rock caverns. Huge underground cavities, almost 10 storey tall and about 3.3 km long are being built.
A similar facility in Mangalore will have a capacity of 1.55 mt and would be mechanically completed by March 2014. A 2.5-mt storage at Padur, near Mangalore, would be completed by end of current fiscal, he said.
With the commissioning of Visakhapatnam storage, India
will join nations like the US, Japan and China that have strategic reserves. These nations use the stockpiles not only as insurance against supply disruptions but also to buy and store oil when prices are low and release them to refiners when there is a spike in global rates.
Originally, India Strategic Petroleum Reserves (ISPRL), the state-owned firm building the strategic stockpile, was to build the Visakhapatnam facility by October 2011 while the Mangalore storages were to be mechanically completed by November 2012. The storage at Padur was scheduled for completion in December, 2012.
Visakhapatnam storage is 94.6% complete, Mangalore is 89.2% and Padur is 86% complete, Moily said.
The Cabinet had in January 2006 approved building of the strategic crude oil storages at a cost of R2,397 crore but due to cost and time overrun the capital required is now estimated at R3,958 crore.
The Visakhapatnam facility will cost R1,038 crore, Mangalore R1,227 crore and Padur R1,693 crore.
ISPRL has till date received R2,529 crore from Oil Industry Development Board (OIDB) and R100 crore from Hindustan Petroleum Corp, officials said adding that the firm requires R1,195 crore either from OIDB or the government to complete the projects.
ISPRIL would need R490 crore in current fiscal and R705 crore in the next, they said.