Pradhan invites firms to build 6.5 MT crude storage capacity

By: |
September 30, 2020 12:15 AM

As per the consumption pattern of FY20, the storages can provide for about 9.5 days of crude oil requirement. State-run oil marketing companies (OMCs) can stock for another 64.5 days.

The country’s existing strategic petroleum reserve facilities are located in Visakhapatnam (1.3 MT), Mangaluru (1.5 MT) and Padur (2.5 MT).

Union minister of petroleum and natural gas invited companies to develop 6.5 million tonne (MT) of crude storage capacities across the country, as the government eyes to increase crude and petroleum products storage capacity from existing 74 days to 90 days.

The country’s existing strategic petroleum reserve facilities are located in Visakhapatnam (1.3 MT), Mangaluru (1.5 MT) and Padur (2.5 MT). As per the consumption pattern of FY20, the storages can provide for about 9.5 days of crude oil requirement. State-run oil marketing companies (OMCs) can stock for another 64.5 days.

The government has already given an ‘in-principle’ approval for building two additional storage facilities with total capacity of 6.5 MT under the public-private partnership model at Chandikhol in Odisha (4 MT) and Padur in Karnataka (2.5 MT). According to sources, the government is looking for prospective partners like financial investors, foreign oil companies, and large construction firms to build the proposed oil reserves.

There is also a possibility to enter into a concessionaire agreement with these partners for the construction, filling and operation of these facilities. “We are also exploring overseas crude storage facilities in the US and other commercially viable locations,” Pradhan added. The minister was speaking at a conference on energy security organised by Global Counter Terrorism Council on Tuesday.

To reduce imports, the government is planning to develop alternative fuels such as ethanol, second generation ethanol, compressed bio gas (CBG) and bio-diesel. “OMCs are in the process of setting up twelve 2G bio-refineries with an investment of Rs 14,000 crore,” the minister pointed out.

The country has set a target of 20% blending of ethanol in petrol and 5% blending of bio-diesel in diesel by 2030. Currently, ethanol blending in petrol is 5.2%, Tarun Kapoor, secretary of the petroleum and natural gas ministry said. Pradhan said that “our quest for energy security will work under the framework of four ‘A’s: availability, accessibility, affordability and acceptability”.

Currently, OMCs import crude oil from over 30 countries in Africa, North and South Americas and Southeast Asia. Imports of liquefied natural gas have also been diversified from traditional supplier Qatar to the US, Australia and Russia.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Chola PAT rises 42% to Rs 432 crore
2Air India privatisation: Bids allowed on basis of enterprise value
3Vodafone Idea: Better cash flows must for survival