India is seriously exploring strategic storage facilities gas across the West coast, and studies for this are in an advance stage, sources said. Exhausted oil wells across the West cost of the country may be used for the purpose, they added.
According to the information, GAIL and ONGC have conducted studies which are almost complete and a notice inviting tender for the same is expected to come out soon. However, it is immediately clear which entity will be floating out the tenders.
The new reserves are to be set up on the lines of Indian Strategic Petroleum Reserve (ISPRL), government run body responsible for maintaing the country’s strategic petroleum reserves, sources said along the sidelines of India Energy Week.
Major economies including the US, China, and Russia have built gas storage systems to ensure supply security. The US accounts for nearly a third of global gas storage.
Moreover, ISPRL is looking to lease out one of its storage caverns it operates in Mangalore with a capacity of 0.75 million tonne. The organisation has witnessed some interest in the same from foreign players.
The expression of interest regarding the same is being prepared and foreign parties, including Kuwait, are interested, said sources. The Mangaluru strategic petroleum reserve includs two caverns of 0.75 million tonne capacity each and with this, each of the two caverns will be leased out.
The Abu Dhabi National Oil Company (ADNOC) has been storing crude oil in one of the caverns since 2018. The company has also signed an agreement to use the Padur facility.
ISPRL manages 5.33 million metric tonnes of strategic crude oil storages in three locations – Vishakhapatnam, Andhra Pradesh, and Mangalore and Padur in Karnataka. With a capacity of 1.33 MMT, the Vishakhapatnam facility was commissioned in June 2015, while the ones in Mangalore and Padur with 1.5 MMT and 2.5 MMT capacity respectively got commissioned in October 2016 and December 2018 respectively.
The government had provided Rs 5,000 crore in the 2023-24 Budget to fill its strategic reserves. The plan was however deferred in November. In the Interim Budget for 2024-25, no such allocation has been made.
The company is also looking at building 5 million tonne additional storage in the second phase on a public- private model. India is the third largest consumer and importer of energy and is looking for expanding its storage facilities for both oil and gas in order to safeguard against any supply disruptions.