The government today decided to set up two more underground crude oil storages in Odisha and Karnataka to increase emergency stockpile cover by 12 days to 22 days.
The Cabinet has approved setting up of 4 million tonne(MT) storage at Chandikhole in Odisha and 2.5 MT storage at Padur in Karnataka, Finance Minister Piyush Goyal told reporters here.
He however did not give details of the cost or the timelines, saying this is just an in-principle approval and detailed engineering will decide the two factors. The meeting was chaired by Prime Minister Narendra Modi.
The storages will be additional to the existing rock caverns to shore 5.33 MT of crude -- Visakhapatnam (1.33 MT), Mangalore (1.5 MT) and Padur (2.5 MT).
"The total 5.33 MT capacity under Phase-1 of the Strategic Petroleum Reserve (SPR) programme is estimated to supply approximately 10 days of India's crude requirement according to the consumption data for 2016-17.
"Cabinet's approval for establishing additional 6.5 MT SPR facilities will provide an additional supply of about 12 days and is expected to augment India's energy security," he said.
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According to an official statement, the government had announced setting up of two additional SPRs during 2017-18 Budget.
Then finance minister Arun Jaitley had announced plans to build two more storages with a combined capacity of 10 MT at Chandikhole and at Bikaner in Rajasthan.
Goyal however did not say on why the storage capacity in the second phase is less than the previously announced.
The approval today includes construction of dedicated SPMs (Single Point Mooring) that would be used for importing crude oil for the two SPRs.
"The SPR facilities at Chandikhole and Padur will be underground rock caverns and will have capacities of 4 MT and 2.5 MT, respectively," the statement said.
The in-principle approval is to take up the project under PPP model to reduce budgetary support of the Centre, it said.
The terms and conditions of such participation would be determined by Oil ministry in consultation with Ministry of Finance after conducting road shows to elicit requirements of the market, including prospective investors, it said.
The government's strategic reserves in India are run by the Indian Strategic Petroleum Reserves Ltd, an SPV set up by the Oil Industry Development Board, under the petroleum ministry.
The first phase of the reserves was built at a cost of Rs 4,098.35 crore.