Modi approves Strategic Petroleum Reserves in Odisha, Karnataka ahead of Lok Sabha Polls

NEW DELHI: The Union Cabinet chaired by Prime Minister  of India Narendra Modi has approved establishment of additional 6.5 Million Metric Tonne (MMT) Strategic Petroleum Reserve (SPR) facilities at two locations, i.e. Chandikhol in Odisha and Padur in Karnataka, including construction of dedicated SPMs (Single Point Mooring) for the two SPRs.nnThe 2019 Lok Sabha elections will be held sometime around April and May.nnThe SPR facilities at Chandikhol and Padur will be underground rockcaverns and will have capacities of 4 MMT and 2.5 MMT respectively. Government had announced setting up of two additional SPRs during the budgetannouncement for 2017-18.nnThe in principle approval is to take up the project under PPP model to reduce budgetary support of Government of India. The terms and conditions of such participation, would be determined by M/oP&NG in consultation with Ministry of Finance after conducting road shows to elicit requirements of market, including prospective investors.nnISPRL has already constructed underground rock caverns for storage of 5.33MMT of crude oil at three locations, viz. Vishakhapatnam (1.33 MMT), Mangalore (1.5 MMT) and Padur (2.5 MMT). The total 5.33 MMT capacity under Phase-I of the SPR programme is currently estimated to supply approximately 10 days of India?s crude requirement according to the consumption data for FY2016-17. Cabinet?s approval for establishing additional 6.5 MMT Strategic Petroleum Reserve facilities will provide an additional supply of about 12 days and is expected to augment India?s energy security.nnThe construction phase of the SPRs at Chandikhol and Padur is likely to generate significant direct & indirect employment opportunities in the states of Odisha and Karnataka.