India’s ambassador to the UAE, Deepak Mittal, said the two sides are working on expanding UAE-linked crude storage in India to 30 million barrels from 5.8 million barrels through a combination of existing caverns and new facilities.
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“As for timelines, our approach is ‘as soon as possible’. The idea now is to increase this to 30 million barrels…New construction projects can take a couple of years depending on site identification, technical feasibility and implementation requirements…,” the ambassador told ET in an interview. He added that there will be investments and joint participation.
The two sides are also examining different storage models, including commercial arrangements under which stored crude could potentially be sold to third countries.
“Strategic reserves can be used in different ways. Some storage can be part of our strategic reserves and some can also have a commercial dimension. Oil can be sold in India or even to third countries. As production capacities increase, there is also a need for storage infrastructure. It helps add to our energy security while creating greater flexibility,” he said.
India, the world’s third-largest energy consumer, is heavily dependent on imports for about 88% for its crude oil needs.Abu Dhabi National Oil Company (ADNOC) said in a statement last month that its potential additions to India’s strategic petroleum reserves (SPRs) could come at existing storage facilities at Mangalore, as well as potential new storage opportunities at Visakhapatnam and Chandikol, both on the Bay of Bengal on the country’s east coast. ADNOC currently holds about 5.86 million barrels of capacity at the Mangalore SPR facility in India.
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Under a separate agreement, India will explore the potential to store crude at the UAE’s eastern oil hub, Fujairah, which would form part of India’s SPRs.
In parallel, India and the UAE are also working on a new framework for strategic gas reserves.
“Ten years ago, we initiated strategic petroleum reserves. Now we are pushing for strategic gas reserves also,” said Mittal. According to him, the gas reserve system under discussion could take multiple forms, including utilisation of already existing LPG caverns in India, and building new LNG storage facilities.