NEW DELHI: Three overseas oil majors are interested in hiring capacity in India’s strategic crude storages, oil minister Dharmendra Pradhan told the Rajya Sabha on Wednesday. “ADNOC (Abu Dhabi National Oil Company) of UAE, Saudi Aramco of Saudi Arabia and Anglo-Dutch Shell have expressed their interest in storing crude oil in the strategic petroleum reserve facilities,” Pradhan told the Rajya Sabha in a written reply. Pradhan said in the first phase, underground crude storage capacity of 5.3 million tonne has been created at Visakhapatnam (1.3 million tonne), Mangalore (1.5 million tonne) and Padur (2.5 million tonne) utilizing rock caverns.
“The Visakhapatnam and Mangalore storage facilities have already been commissioned. The facility at Visakhapatnam has already been filled up and nearly one-fourth of Mangalore storage facility has also been filled. The storage facility at Padur has also been completed,” he said. These reserves as well as crude stored in tanks at refineries and pipelines are enough to meet 73 days of India’s oil requirement. The government has exempted overseas oil companies from income-tax liability on sale of their crude stored in the strategic storage.
Imports meet 80% of its crude requirement and the storages are being built as a cushion against sudden supply disruption due to geopolitical incidents or natural calamities. According to reports, crude imports from the UAE are expected to rise to 18.5 mt in 2016-17. Broad contours of discussion with ADNOC indicate the Abu Dhabi firm is envisaged to store 1.5-million tonne oil at the Mangalore storage facility. Initially, ADNOC may be allowed to fill 0.75 million tonne, half of which may be made available to India as storage fee.
