India is exploring the possibility of storing crude oil in US’ Strategic Petroleum Reserve as part of its energy security strategy.
Such an arrangement, discussed at the second India-US strategic energy partnership ministerial on Friday will help India, the world’s third largest oil importer to tackle emergency situations and help it tide over short-term supply disruptions.
“The sides signed a Memorandum of Understanding (MOU) to begin cooperation on Strategic Petroleum Reserves operation and maintenance, including exchange of information and best practices. They also discussed the possibility of India storing oil in the U.S. Strategic Petroleum Reserve to increase their nation’s strategic oil stockpile," the two countries said in a joint statement.
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India will have oil reserves equivalent to at least 87 days of net imports, once the $1.6 billion second phase of Indian Strategic Petroleum Reserves (ISPR) programme, which aims to add 12 days of crude storage, is operational. These facilities together will help support 22 days of India’s crude oil requirements. Indian refiners also maintain 65 days of crude storage, taking the total tally to 87 days.
In comparison, IEA countries hold 1.55 billion barrels of public emergency oil stocks. In addition, 650 million barrels are held by industry under government obligations, and can be released as needed.
India has an existing storage capacity of 5.3 million tonnes (mt) at Visakhapatnam (1.33mt), Mangaluru (1.5 mt) and Padur (2.5mt) built at an investment of $600 million in the first phase. This is operational and can support 9.5 days of net imports. In addition, the NDA government has approved the construction of an additional 6.5 mt of strategic crude oil reserves at Chandikhol (4 mt) in Odisha and Padur (2.5 mt) in Karnataka.
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