finance
India Directs ONGC to Build New Crude Storage Site
India’s government has asked state-owned Oil and Natural Gas Corp to construct and fill a new strategic petroleum reserve holding 1.75 million tons of crude. The project follows an energy supply crunch that raised fuel prices and inflation in the world’s third-largest oil importer.
Jul 10, 3:30 AM·1m read3 sources
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India’s government directed state-owned Oil and Natural Gas Corp last month to build and fill a new strategic petroleum reserve site with an estimated investment of $1.6 billion. The facility will hold 1.75 million tons, equal to 12.8 million barrels. Oil and Natural Gas Corp will also request government permission to allow commercial use of the stockpile, Reuters reported.
India already maintains a national crude oil reserve of 5.33 million tons, or about 39 million barrels, at three sites in the southern part of the country. Those sites are operated by the government-owned Indian Strategic Petroleum Reserves Ltd. The existing reserves cover a maximum of eight days of national oil demand.
Delhi has additional projects under consideration, including one site with 4 million tons of capacity and another with 2.5 million tons. India has sought to increase strategic storage for years as domestic demand grows faster than China’s. The recent Middle East conflict and resulting supply pressures have sped up the timeline for adding capacity.
