Days after deciding to relocate the $44 billion refinery and petrochemical project from Ratnagiri in Maharashtra, the Centre has now asked Saudi Arabia to participate in its plans for building the strategic fuel reserves caves, which is being built in Karnataka and Andhra Pradesh.
Petroleum minister Dharmendra Pradhan, in a meeting held with Saudi oil minister Khalid Al Falih on Saturday, is believed to have discussed various issues including the investment in strategic caves, which India is developing for its use during an emergency. The caves have the potential to save more than nine days of fuel requirements.
"Invited HE @Khalid_AlFalih to partner in India's Strategic Reserves Program and further enhance Saudi investments in India's refining & petrochemical sectors. Strategic engagements in energy will mutually benefit both the countries and further bolster our bilateral ties," Pradhan tweeted after the meeting.
India has built 5.33 million tonne (mt) of emergency storage, which is enough to meet its oil needs for 9.5 days, in underground rock caverns in Mangalore and Padur in Karnataka, and Visakhapatnam in Andhra Pradesh. It has allowed foreign oil companies to store oil in the storages on the condition that the stockpile can be used by New Delhi in case of an emergency. Abu Dhabi National Oil Company (ADNOC) has hired half of the 1.5 mt strategic oil storage at Mangalore and 2.5 million tonne at Padur facility. In Phase-II, India plans to build an additional 6.5 mt facilities at Chandikhol in Odisha and Padur, which is expected to augment the emergency cover against any supply disruption by another 11.5 days.
The oil ministry officials said that both the ministers discussed various Saudi investments in the Indian oil and gas sector, including the urgent steps to be taken to expedite the implementation of the first joint venture West Coast Refinery and Petrochemical project in Maharashtra which will be the largest greenfield refinery in the world. Saudi Aramco and its partner ADNOC of UAE have signed agreements to take 50% stake in the project. The remaining is held by public sector oil firms - IOC, BPCL and HPCL.
The state government, after facing severe resistance from its political ally Shiv Sena, had announced the relocation of the project in a pre-election understanding. The government since then is understood to be looking at various other alternative sites, and may zero in on a place near Roha in Konkan, though officially nothing has been announced yet.
The development seems significant as India imports about 80% of its fuel need making it vulnerable to the external factors. Further, any increase in fuel prices leads to a spike in inflation. With the construction of fuel reserves caves, the government may purchase oil when the price is low and then supply it when the prices go down.
SECURING ENERGY
- 5.33 mt – India has built emergency storage
- 6.5 mt – India plans to build additional facilities at Chandikhol in Odisha and Padur in Karnataka
- 50% – Aramco and ADNOC to hold in West Coast Refinery and Petrochemical project
(With inputs from PTI)
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 "Fuel reserves caves")
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