Strategic Crude Stocks at 6 New Locations on Cards

Engineers India to submit reports by year end; new reserves add to existing capacity

- Utpal Bhaskar & Rituraj Baruah

India is doubling down to build new strategic petroleum reserves (SPR) at six proposed locations in the quest for energy security in a volatile world, two people aware of the development said. Emergency oil reserves that are stocked up while prices are low and released at times of exigencies are crucial for the world's third-largest energy consumer, which imports 85% of its crude requirements.

The government has asked state-run Engineers India Ltd (EIL) to make detailed feasibility reports (DFRs) to build such new reserves at six locations, two people aware of the development said. Of these, one is proposed to be at the Mangalore Special Economic Zone in Karnataka and the other at salt caverns in Rajasthan's Bikaner. State-owned EIL, an engineering and consultancy firm focusing on the energy sector, is expected to submit its reports by the end of the year.

"EIL is doing DFR in six locations, which are close to the coast and refineries; including in Mangalore SEZ, and also salt caverns in Bikaner for strategic purposes. They haven't finalized it, with the study expected to be completed by the end of this year. The plan is to take India's reserve capacity to 90 days. That's the basic requirement," said one of the two people cited above requesting anonymity.

During the West Asia conflict, Iran threatened to close the Strait of Hormuz in its territorial waters, through which a fifth of the world's oil cargoes pass. With India consuming 5.5 million barrels of crude oil per day (mbpd), the threat turned the spotlight on 1.5-2 mbpd oil that heads for India through this vital choke point, highlighting the need for an effective SPR programme.

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