India to store its strategic oil reserves in US

India is set to use the underground caverns in Louisiana and Texas in the United States to store its strategic crude oil reserve to meet emergency needs in case of disruptions in supply.

India and the United States on Friday inked a Memorandum of Understanding (MoU) to begin cooperation on strategic petroleum reserves. The MoU was signed after a video conference between Petroleum Minister Dharmendra Pradhan and the US Energy Secretary Dan Brouillette. “We are in an advanced stage of discussions for storing India’s crude oil in the US strategic petroleum reserves to increase our emergency stockpile,” said Pradhan.

New Delhi’s move to use US facilities to enhance strategic oil reserves came amid China’s aggression along its disputed boundary with India.

“Today, we're pleased to announce a technical cooperation agreement between US @Energy Department and Indian @PetroleumMin on Strategic Petroleum Reserve, which ensures a consistent energy supply, protects national security, and promotes regional and global stability,” tweeted the Bureau of South and Central Asian Affairs of the US State Department.

The Indian Strategic Petroleum Reserve Limited already constructed underground rock caverns for storage of 5.33 MMT of crude oil at three locations – Vishakhapatnam (1.33 Million Metric Tonne) in Andhra Pradesh and Mangalore (1.5 MMT) and Padur (2.5 MMT) in Karnataka.

The total 5.33 MMT capacity under Phase-I of the strategic petroleum reserve programme is currently estimated to supply approximately 10 days of the crude requirement of India at the consumption rate of the 2016-17 financial year.

The Modi Government in June 2018 approved the establishment of an additional 4 Million Metric Tonne (MMT) strategic petroleum reserve facility at Chandikhol in Odisha. It also decided to raise the capacity of the facility at Padur in Karnataka by 2.5 MMT. The new facilities will provide an additional supply of petroleum for about 12 days.

The US holds the largest strategic petroleum reserve of the world with its underground facilities in Louisiana and Texas having the capacity to store 797 million barrels.