Indian Strategic Petroleum Reserves

My Dear Young Indians,

Assume that a family consumes 1,000 lites of water every day (To bathe, wash clothes, drinking etc)

But the overhead water tank (on rooftop) or underground water tank that the family maintains at their home would be much bigger. Capacity of water tanks would be 5,000 or 10,000 litres.

Water that we store at our home is more than our daily requirement.
Why do we do this ?

Because in case we face water shortage, we will be able to meet our water requirements with the stored water.

A similar logic applies to Crude Oil/ Petroleum also.

Countries that do not have sufficient reserves of crude oil of their own have to depend on imports. And imports may get affected during times of war or any other political crises. 

Please recall our last discussion on what led to Nationalisation of Oil companies. Foreign oil companies had tried to create problems for us during the 1971 war. 

Nationalisation of Oil Companies in India  

To safeguard their economy and national security during times of an energy crisis, countries maintain stocks of crude oil. These are known as Strategic Petroleum Reserves.

Does India have Strategic Petroleum Reserves?

Yes. The process of setting up Strategic Petroleum Reserves started in 2015.

Considering that India has to import most of its oil requirement, these Strategic Petroleum Reserves should have been built long long back but successive Govts did not build these reserves for reasons best known to them.

Who is responsible for setting-up and maintaining these Strategic Petroleum Reserves?

A Special Purpose Vehicle (SPV) by the name Indian Strategic Petroleum Reserves Limited (ISPRL) has the responsibility of setting up and maintaining strategic petroleum reserves for India.  

What is a Special Purpose Vehicle (SPV) ?

Special Purpose Vehicle (SPV) is a business jargon.

It simply means an entity or a limited company that is created to perform a specific or special task. SPVs are generally created in the form a Limited Liability Company. An SPV is a subsidiary of a parent company.

We had talked about subsidiaries during our discussion on State Bank of India and banks owned by erstwhile princely states.

History of The State Bank of India (SBI)

What are these reserves?

Think of these reserves as underground water tanks that we have at our homes and buildings. When we have running supply of water we fill up our underground tanks to secure our water supply. The crude oil storage are constructed in underground rock caverns. Underground rock caverns are considered as the safest means of storing hydrocarbons.

What is a cavern ?

A cave or cavern is a natural void or cavity in the ground.

What are hydrocarbons?

Hydrocarbons are compounds that are made up of only Hydrogen and Carbon. Crude oil or petroleum is a Hydrocarbon.

Where are India’s Strategic Oil Reserves located?

These are located on the East and West coast of India. Crude oil from these caverns can be supplied to the Indian Refineries either through pipelines or through a combination of pipelines and coastal movement. The reserves are in Vishakapatnam (Andhra Pradesh), Mangalore ( Karnataka) and Padur, near Udipi in Karnataka.

This is the Reserve storage (Cavern) in Vishakapatnam. This is full of oil now.

This is the reserve storage in Mangalore.

This is Padur Reserve.

What is the total capacity of India’s Strategic Oil Reserves?

The total capacity is 5.03 MMT (Million Metric Tonnes). This means 5.03 MMT of crude oil can be stored in these reserves.

Is the Govt planning new Strategic Oil Reserves?

Yes. The Govt has approved setting up additional reserve of 2.5 MMT in Pudur and a new reserve of 4 MMT in Chandikhol in Odisha. New facility in Rajkot (Gujarat) is also being considered.

 

We are proud We are Indian.

Jai Hind !

Gaurav Negi