India to build its first strategic oil storage in three months

India, which is dependent on fuel import to take care of close to 80 per cent of its requirement, will have the first strategic oil storage ready in the next three months. The storage facility will help India store its crude requirement for a fortnight.

 An underground storage facility is being built at Visakhapatnam in Andhra Pradesh, Mangalore and Padur in Karnataka to store about 5.33 million tonnes of crude oil, Oil Minister Veerappa Moily said here.

 "The storage at Visakhapatnam is expected to be commissioned in January 2014," Moily said here.

 Visakhapatnam facility would have the capacity to store 1.33 million tonnes of crude oil in underground rock caverns.

Huge underground cavities, almost ten storey tall and approximately 3.3 km long are being built.

 A similar facility in Mangalore will have a capacity of 1.55 million tonnes and would be mechanically completed by March 2014. A 2.5-million tonne storage at Padur, near Mangalore, would be completed by end of current fiscal, he said.

 With the commissioning of Visakhapatnam storage, India will join nations like the US, Japan and China that have strategic reserves.

These nations use the stockpiles not only as insurance against supply disruptions but also to buy and store oil when prices are low and release them to refiners when there is a spike in global rates.

"Visakhapatnam storage is 94.6 per cent complete, Mangalore is 89.2 per cent and Padur is 86 per cent complete," Moily said.