(MENAFN- AsiaNet News) The Government of India has unveiled plans to lease out space in underground rock caverns originally designated for storing hydrocarbons as part of the nation's strategic petroleum reserve. This decision comes following a strategic shift in response to emerging trends in global oil markets and the need for optimizing existing infrastructure for energy security.
The announcement, reported by PTI, stated that an expression of interest for leasing the storage facilities would be issued shortly. These underground storage facilities, strategically located in three southern Indian cities -- Visakhapatnam, Mangalore, and Padur in Karnataka -- were initially constructed by India Strategic Petroleum Reserve Ltd. to store a total of 5.33 million tonnes of oil, primarily for emergency situations like supply disruptions or war.
The move to lease out these caverns underscores India's adaptability to changing market dynamics and its efforts to bolster energy security. With the deferral of plans to fill the caverns with crude oil, as outlined in the Union Budget 2023-24, the government aims to leverage these assets to meet evolving energy needs and promote commercial utilization.
Presently, the National Oil Company (Adnoc) from Abu Dhabi has already secured leasing rights for half of the storage capacity at Padur and 1.5 million tonnes at Mangalore. However, significant storage space remains available, including 0.75 million tonnes at Mangalore and the vacant portion in Visakhapatnam, which will be made available for leasing, as confirmed by LR Jain, CEO and Managing Director of Indian Strategic Petroleum Reserves Limited (ISPRL).
Crucially, Jain emphasized that while international companies like Adnoc can store oil in these reserves, India will retain priority access to the stored oil, ensuring readiness during emergency situations. This provision underscores the government's commitment to national energy security and resilience in the face of unforeseen challenges.
The decision to lease out these caverns marks a strategic pivot in India's energy management approach, aligning with its status as the world's third-largest oil importer and consumer. By optimizing existing infrastructure and engaging with international partners, India aims to enhance its energy resilience and mitigate risks associated with global market fluctuations. As the nation continues its pursuit of sustainable economic growth, strategic initiatives like these play a pivotal role in securing its energy future.
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