3 oil storage facilities in pipeline

Underground tanks to come up at Mangalore, Padur and Vizag

In an effort to insulate the country’s economy from abrupt oil supply disruptions, the Centre in 2005 decided to set up three underground oil storage facilities—one at Visakhapatnam and one each at Mangalore and Padur in Karnataka.

The government has specifically set up a state-owned firm, India Strategic Petroleum Reserves Limited (ISPRL), to build the proposed strategic oil storage facilities.

ISPRL has been floated by the Oil Industry Development Board (OIDB), a government body that lends money to construct energy projects, as its wholly-owned subsidiary to build and operate this sensitive project. The three-storage facilities will have a combined capacity to store nearly 5.33 million tonnes of crude oil, enough to meet the country’s oil requirements for a fortnight, sources in the Petroleum Ministry told Deccan Herald.

Setting up strategic oil storage facilities will help in further bolstering oil energy security of the country, which currently meets more than 75 per cent of its oil requirement through import, sources said.

Recently, a high-level team of the ISPRL, while giving a presentation to the Petroleum Ministry about the progress of work on the proposed strategic oil storage facilities, indicated that the storage well at Visakhapatnam would be completed by October 2011.
The other two oil storage facilities proposed to be built at Mangalore and Padur will be completed by the end of 2012.

Ideal terrain

The terrain of Visakhapatnam, Mangalore and Padur endowed with hard rock caverns is ideal for setting up such underground oil storage facilities of large magnitude.

Besides, from the strategic point of view, these three sites offer an ideal location for setting up underground oil storage facilities, sources said.   

Visakhapatnam will have capacity to store 1.33 million tonnes of crude oil while the other two storage facilities at Mangalore and Padur will have a capacity of 1.55 million tonnes and 2.5 million tonnes, respectively.

The construction of such underground oil storage facilities, which will entail building storage tanks of three to 3.5-km-long much below the ground level, will call for specialised civil engineering knowledge, sources said.

“The ISPRL will engage the best engineering talent in the country to build these high-tech underground storage facilities. Besides, it will seek expertise from abroad if required,” sources said.

“The total cost of building the three proposed storage facilities is estimated to be around Rs 3,000 crore,” sources said.