India to raise strategic oil reserves to 8.5mt by 2012

New Delhi: India will create an additional five million tonne strategic petroleum reserve by 2012, over and above an existing three million tonne reserve, to meet eventualities in case of war or natural calamities.

An old US strategic oil reserve facility at Baton Rouge, on the Mississippi River

The additional reserve would raise the country's total storage capacity to 8.5 million tonnes, enough to meet 90-days consumption, parliament was informed on Tuesday.

''To cater to situations like wars and natural calamities, we have established an SPV (special purpose vehicle) called Indian Strategic Petroleum Reserve Ltd (ISPRL) that will create a storage facility of five million tonnes by 2012,'' minister of state for petroleum Jitin Prasada said.

''We presently have storage facilities for 3.5 million tonnes. This will rise to 8.5 million tonnes,'' he added.

Prasada was responding to a supplementary question on whether the government had entered into contracts for assured petroleum supplies in case of war and other emergencies. ''There is no such provision as of now,'' Prasada replied.

ISPRL has said that new storage facilities would be created at Visakhapatnam, Mangalore and Padur, near Udupi. ''The proposed storages would be in underground rock caverns near the east and west coasts so that they are readily accessible to the refining sector.''

Rock or salt caverns are used by a number of countries as storage area for their petroleum reserves. The United States for instance, utilises huge salt caverns along the coast of Texas and Louisiana to store its petroleum reserves.