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The novel coronavirus outbreak may be a blessing in disguise for India’s energy security efforts, with the National Democratic Alliance (NDA) government exploring ways to leverage the depressed prices to fill in its strategic crude oil reserves, said people aware of the development.
India has an existing storage capacity of 5.3 million tonnes (mt) at Visakhapatnam (1.33mt), Mangaluru (1.5 mt) and Padur (2.5mt) built at an investment of $600 million in the first phase. This is operational and can support 9.5 days of net imports. In addition, the NDA government has approved the construction of an additional 6.5 mt of strategic crude oil reserves at Chandikhol (4 mt) in Odisha and Padur (2.5 mt) in Karnataka. The government created a special purpose vehicle (SPV)—Indian Strategic Petroleum Reserves Ltd. (ISPRL)—-for building these SPRs.
India will have oil reserves equivalent to at least 87 days of net imports, once the $1.6 billion second phase of ISPR which aims to add 12 days of crude storage, is operational. These facilities together will help support 22 days of India’s crude oil requirements. Indian refiners also maintain 65 days of crude storage, taking the total tally to 87 days.
In comparison, IEA countries hold 1.55 billion barrels of public emergency oil stocks. In addition, 650 million barrels are held by industry under government obligations, and can be released as needed.
The cost of the Indian basket of crude, which averaged $56.43 and $69.88 per barrel in FY18 and FY19, respectively, was $65.52 in December, according to data from the Petroleum Planning and Analysis Cell. The price was $33.49 a barrel on 13 March. The Indian basket represents the average of Oman, Dubai and Brent crude.
www.livemint.com
India has an existing storage capacity of 5.3 million tonnes (mt) at Visakhapatnam (1.33mt), Mangaluru (1.5 mt) and Padur (2.5mt) built at an investment of $600 million in the first phase. This is operational and can support 9.5 days of net imports. In addition, the NDA government has approved the construction of an additional 6.5 mt of strategic crude oil reserves at Chandikhol (4 mt) in Odisha and Padur (2.5 mt) in Karnataka. The government created a special purpose vehicle (SPV)—Indian Strategic Petroleum Reserves Ltd. (ISPRL)—-for building these SPRs.
India will have oil reserves equivalent to at least 87 days of net imports, once the $1.6 billion second phase of ISPR which aims to add 12 days of crude storage, is operational. These facilities together will help support 22 days of India’s crude oil requirements. Indian refiners also maintain 65 days of crude storage, taking the total tally to 87 days.
In comparison, IEA countries hold 1.55 billion barrels of public emergency oil stocks. In addition, 650 million barrels are held by industry under government obligations, and can be released as needed.
The cost of the Indian basket of crude, which averaged $56.43 and $69.88 per barrel in FY18 and FY19, respectively, was $65.52 in December, according to data from the Petroleum Planning and Analysis Cell. The price was $33.49 a barrel on 13 March. The Indian basket represents the average of Oman, Dubai and Brent crude.
India to leverage low prices to fill strategic crude oil reserves
With global oil demand plunging due to spreading contagion crude prices are in tailspin, providing an opportunity for India’s ambitious and costly Indian Strategic Petroleum Reserves programme
www.livemint.com
