HPCL asks for capacity in India's first strategic crude oil storage
HPCL seeks capacity in strategic crude oil storage
Tuesday, July 13, 2010
State-run Hindustan Petroleum Corporation (HPCL) has hunted a capacity in India's first strategic crude oil storage being built on the east, as an insurance against supply disruptionsAround 75 per cent of the total crude demand in India is being imported, thus it requires under-ground storages at Visakhapatnam in Andhra Pradesh and Mangalore and Padur in Karnataka to store about 5.33 million tones of crude oil. Once this is achieved it will be enough for nation's oil requirement of 13-14 days.HPCL has already submitted a proposal to the Indian Strategic Petroleum Reserve (ISPR), which is building the strategic stockpile, for utilizing 0.3 million tones capacity of the 1.33 million tones crude cavern project at Visakhapatnam at a proportionate cost of Rs 230 crore, as per official sources. Moreover, HPCL, Mangalore Refinery and Petrochemicals Ltd (MRPL) too has sought 0.3 million tones capacity of 1.55 million tones Mangalore cavern. Both proposals involve sharing cost in a proportionate manner with ISPR for the caverns, the officials added. Besides, HPCL operates refinery at Visakhapatnam while MRPL too has a unit at Mangalore. The officials also have shared the cost structure and details of the projects, 5 million tones strategic storage facility was being built with an estimated cost of Rs 3,000 crore. The carven at Visakhapatnam is set to be completed by October 2011 while a similar facility in Mangalore will be mechanically completed by November 2012. The 2.5 million tones storage at Padur, near Mangalore, would be completed by December 2012. Besides, HPCL and ISPRL are also likely to sign an operational agreement to address issues such as type of crude oil that could be stored at the cavern, frequency of crude imports and evacuation need of HPCL for processing crude at Visakh Refinery. Also, a similar pact will be arranged between the company and MRPL. After the successful completion of this project, India will be joining the group of nations like the US, Japan and China who have their own 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.However, the storage India is comparatively small compared to the 90 day strategic stockpile in the US. New Delhi was considering to raise the storage capacity to 15 million tones to cover for 45 days requirement but no further talks has been initaited.
Source: http://www.hindustanpetroleum.com/En/ui/HPCLinNews.aspx
