India’s first strategic oil storage facility at Vizag to be ready by September

By SNV Sudhir

Visakhapatnam, May 9, 2014:  India’s first massive underground strategic oil storage facility planned at Vizag will be ready for commissioning in September.  The petroleum minister M Veerappa Moily, earlier said that it will be ready for operations in January.

 The project is already delayed by two years due to various issues. The Vizag facility undertaken by India Strategic Petroleum Reserves Ltd (ISPRL) launched in January 2008, was supposed to be commissioned by 2012.

ISPRL, is a Special Purpose Vehicle, owned by Oil Industry Development Board (OIDB) to build such strategic storage facilities.  ISPRL also, planned two other such facilities at Manglore and Pudur, both in Karnataka. While, Mangalore facility has a capacity of 1.55 million tonnes Pudur storage capacity is pegged up at 2.5 million tonnes.

These strategic storages would be in addition to the existing storages of crude oil and petroleum products with the oil companies and would serve as a cushion in response to external supply disruptions.

Vizag facility can store 1.33 million tonnes of crude oil. The storage would be a 7.5-km-long tunnel with several caverns to store various grades of crude. The roof of these caverns would be 162 meters below the sea level.

ISPRL also held road shows and business meets at Singapore, London and Mumbai to attract foreign funds.

Vizag already houses an underground facility to store LPG, the first of its kind in Southeast Asia. A joint-venture of HPCL with oil major TOTAL of France, the Cavern Marine Terminal can hold 60,000 million tonnes of LPG storage. Built at the cost of Rs 333.3 crore, the LPG facility was completed in 2007.

“Plans are afoot to commission the Vizag facility by September this year, whereas the Mangalore and Padur projects are expected to be commissioned after the cross country pipeline is completed, which is anticipated by June, 2015,” said a top official of ISPRL.

India will join countries like the US, Japan and China that have strategic reserves once the Vizag facility comes into operation.