Abu Dhabi, first in the race to secure rights for Underground Caverns in India

Indian Government has unwrapped plans to lease out space in underground rock caverns originally designated for storing hydrocarbons as part of the strategic petroleum reserve of the country. Followed by strategic shift in response to emerging trends in global oil markets & necessitate of optimizing current infrastructure for energy security, this strategic move signifies catering the demands.

As per the report by PTI, a term of interest for leasing the storage facilities will be issued in a while. Advantageously, these underground storage facilities located in three southern cities of India including, Visakhapatnam, Mangalore and Padur in Karnataka, which are originally built by India Strategic Petroleum Reserve Ltd to stock up a total of 5.33 million tonnes of oil to utilize for emergency situations such as supply disruptions or war.

The step to lease out these caverns highlights the country’s adaptability to changing market dynamics & its efforts to boost energy security. As outlined in the Union Budget 2023-24 about the delay of plans to fill the caverns with crude oil, the government fosters to leverage these assets to meet evolving energy needs & promote commercial operations.

As confirmed by LR Jain, CEO & Managing Director. Indian Strategic Petroleum Reserves Limited (ISPRL), the National Oil Company - Adnoc from Abu Dhabi has already lifted leasing rights for half of the storage capacity at Padur & 1.5 million tonnes at Mangalore. And the major storage space remains available including 0.75 million tonnes at Mangalore & the vacant portion in Visakhapatnam will be made available for leasing.