It will form part of the buffer stock to be used in times of national crisis
Two other storage reserves to come up at Padur in Udupi, Visakhapatnam in Andhra Pradesh
They will together contain a buffer stock of 5 million tonnes of crude oil
MANGALORE: A small ceremony on Wednesday marked the commencement of work on the Mangalore chapter of the Indian Strategic Petroleum Reserves Limited (ISPRL) — one of the most ambitious capacity building projects of the Oil Industry Development Board (OIDB) in recent times.
ISPRL is a special purpose vehicle of the OIDB, which is an autonomous body formed by the Ministry of Petroleum and Natural Gas (Government of India). The Mangalore reserve is one of the three strategic reserves of crude oil being planned in the country, the others being at Visakhapatnam (Andhra Pradesh) and in Padur (Udupi district, Karnataka). Once completed, the three projects will together contain a buffer stock of 5 million tonnes of crude, capable of sustaining the fuel needs of the country for 14 days.
All the refineries in the country can presently sustain the country’s demand for three weeks. It is hoped that these reserves will substantially improve the country’s ability to withstand economic and military sieges and provide it with much-needed bargaining power with oil supplying nations.
ISPRL officials told The Hindu that the Mangalore reserve was coming up on 82.62 acres of land acquired from the Mangalore Special Economic Zone Ltd., at a cost of Rs. 41.31 crore. The construction is expected to be completed by 2012 at a cost of Rs. 1,000 crore. Work on the Visakhapatnam reservoir started in April last year while land is still being acquired for the project in Padur.
According to present official estimates, the three projects will cost over Rs. 11,000 crore. The construction of these storage spaces is expected to cost just a fraction of the total investment. The main expense will be incurred during the filling of the reservoirs with crude oil, which is expected to cost over Rs. 8,000 crore based on average crude prices of $ 55 a barrel.