New Delhi: Feb 11, 2016 :India is set to lease out to the United Arab Emirates its strategic petroleum reserve at Mangaluru in Karnataka.Prime Minister Narendra Modi and Crown Prince of Abu Dhabi, Sheikh Mohamed Bin Zayed Al Nahyan, are likely to discuss UAE’s participation in building strategic petroleum reserve in India, when they meet in New Delhi on Thursday.
The negotiation on an agreement between India Strategic Petroleum Reserve Limited (ISPRL) and Abu Dhabi National Oil Corporation (ADNOC) has reached an advanced stage and the two leaders might push for its early signing, officials told Deccan Herald in New Delhi.
The Crown Prince of Abu Dhabi, who is also the Deputy Supreme Commander of UAE Armed Forces, will land in New Delhi on Wednesday to commence his first state visit to India. The de-facto ruler of UAE will call on President Pranab Mukherjee and hold a meeting with Prime Minister Narendra Modi on Thursday. He will visit Mumbai before returning to Abu Dhabi on Friday.
The visit of Sheikh Mohammed follows Modi’s tour to UAE in August 2015 during which the two countries agreed to elevate the relationship to a comprehensive strategic partnership.
The strategic petroleum reserve is being built in underground rock caverns at Mangaluru. It is one of three such storages New Delhi is constructing to ensure energy security of India in the wake of any emergency, including wars or disruption in international supply. The two others are coming up at Padur in Udupi and at Visakhapatnam in Andhra Pradesh.
The 1.5 MMT reserve at Mangaluru is being built under a total area of 104.73 acres at an estimated cost of Rs 1227 crore. Once signed, the agreement will allow the ADNOC to fill up the storage and maintain it as a strategic reserve for India.
If New Delhi finds the nation in any emergency situation and supply of fuel is disrupted in future, the ISRPL – a wholly owned subsidiary of Oil Industry Development Board – will notify the ADNOC and draw petroleum from the reserve.
The issue of price of crude oil stored in the reserve is being negotiated and a mechanism for pricing will be spelt out.