Abu Dhabi's oil firm to help fill India's strategic reserve, says Pradhan

Abu Dhabi National Oil Company (ADNOC) will send three large ships carrying crude oil beginning April to fill half of the 1.5 million tonne strategic oil reserves India has built at Mangaluru.

Oil Minister Dharmendra Pradhan said ADNOC last week signed an agreement to use half of the underground storages built at Mangaluru as part of emergency stockpile.

ADNOC had indicated its oil consignments for the next two months are booked and it would start filling the Mangaluru storage it had taken from April, he said.

It would take three very large crude carriers (VLCCs) to fill 5.86 million barrels or 0.75 million tonnes of space it has taken in Mangaluru.

The storage would be filled by May, he said.

ADNOC had last year given up its crude storage lease in South Korea and instead agreed to store oil at Mangaluru to establish ground presence in the world’s third largest oil consuming nation.

Of the crude stored, a part would be used for commercial purposes by ADNOC, while a major part would be purely for strategic purposes.

Indian Strategic Petroleum Reserves Ltd has built around 39 million barrels (5.33 million tonnes) of strategic crude oil storage at three locations — Padur and Mangaluru on the western coast and Visakhapatnam on the eastern coast.

The oil stored in the underground rock caverns at the three locations are to be used in an emergency.

“India currently has storages that can meet requirement for 66 days. The strategic storages can meet requirement of 10 more days,” Pradhan said.

The Visakhapatnam facility can meet two and half days need while Mangaluru can meet 2.8 days requirement. Padur can meet 4.7 days requirement, he said.

The Strategic Petroleum Reserves (SPR) at Mangalore consists of two compartments with a total storage capacity of 1.5 million tonnes (11 million barrels), he said.

While one compartment has been filled with crude oil through funds made available by the government, the other compartment will be filled by crude supplied by ADNOC, he said.

India imports over 80 per cent of its crude oil needs, out of which about 8 per cent is supplied by the UAE.

ADNOC hired the Mangalore storage just as it ended a contract to store 6 million barrels of crude oil at Korea National Oil Corp's Yeosu facility in the country's southwest coast.

South Korea had first right over the oil in the event of a supply emergency.

While the Vishakhapatnam storage of ISPRL has a capacity of 1.33 million tonnes (9.77 million barrels) of crude oil, Padur can stock 2.5 million tonnes (18.37 million barrels).