Udupi, May 22, 2018: To further strengthen strategic relations between India and the United Arab Emirates and enhance India’s energy security, the Abu Dhabi National Oil Company (ADNOC) on May 21, Monday indicated its interest to store crude at Indian Strategic Petroleum Reserve Ltd.’s Padur facility in Udupi district.
This was indicated by ADNOC’s Director (Marketing) Abdulla Salem Al Daheri while interacting with media on the occasion to mark its delivery of the first consignment of 2 million barrels of crude to ISPRL’s Mangaluru facility here. He said the ADNOC team visited Padur on Monday and was impressed with the facility. ISPRL is planning to commission Padur facility in a couple of months.
ISPRL had signed an agreement with ADNOC in February during Prime Minister Narendra Modi’s visit to the UAE wherein the latter had agreed to store 5.86 million barrels of crude at the facility in Mangaluru. The first consignment despatched through Very Large Crude Carrier (VLCC) MT Inspiration from ADNOC, in the presence of Union Petroleum Minister Dharmendra Pradhan on May 12, reached Mangaluru on Monday.
As per the agreement, India can use the entire crude in cases of emergency on pre-agreed prices while ADNOC can sell a portion of the crude to Indian refineries without affecting the emergency storage. India would not incur any expenses on the crude till it makes use of the same.
In all, India has built three SPRs — in Visakhapatnam (1.33 million tonnes), Mangaluru (1.5 million tonnes), and Padur (2.5 million tonnes) in Phase 1. ADNOC is expected to deliver another two consignments through VLCCs post-monsoon to Mangaluru, said ISPRL CEO and Managing Director H.P.S. Ahuja.
Sunjay Sudhir, Joint Secretary (International Relations), Union Petroleum Ministry, said the government has plans to add 6.5-million tonne capacity to the existing ISPRL under Phase 2. Padur in Udupi district might get another 2.5-million tonne SPR, he said.
Speaking earlier at the formal programme, Mr. Sudhir said the consignment delivery has ushered in a strategic relationship between the UAE and India, which is more than a bilateral relationship. He thanked Karnataka government for waiving VAT and entry tax for ISPRL’s crude.
ISPRL’s present storage capacity can ensure at least 30 days of fuel in case it does not get overseas crude for any reason.